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  • Jul 12, 2021
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Discuss about the recent trends in the crude oil production by OPEC+ nations & explain briefly the role of OPEC+ nations in driving the fuel prices of India.

Introduction:

Organization of Petroleum Exporting Countries is an international organization. It has 13 countries. It was founded in September, 1960. Its headquarters is at Vienna, Austria.

Body:

The OPEC nations:

  • Iraq, Iran, Saudi Arabia, Kuwait, UAE from Asia.
  • Republic of Congo, Equatorial Guinea, Nigeria, Algeria, Libya, Gabon, Angola from Africa.
  • Venezuela from South America

 

India exports more than 80% of its crude oil from OPEC nations. Thus any fluctuations and internal conflicts will alter India’s petroleum prices. There are other countries such as USA who export their crude oil to India. India is currently recording steep rise in oil prices. Post pandemic situation has increased the demand. The supply had come down during the pandemic. Revenue of state government also depends upon fuel prices. Due to pandemic lot of revenues from other sources had come down. Thus regulating the fuel prices has become a challenge.

Along with this, OPEC+ nations had entered a 2-year deal to cut the production levels and wait for better prices. UAE recently has opted for extending the same deal for few more years. But there was no consensus about this proposition. Recently due to reasons such as vaccination roll-out, global reduction in Covid-19 the economic demands are in increase. Economies are coming back to their normalcy. Still the prodcution of crude oil has not picked up sufficient pace. Some of the OPEC nations are playing the ‘waiting-game’. All these factors are contributing for high prices. 

Conclusion:

Since petroleum is a non renewable and highly-depleting resource at an alarming rate, these problems are unavoidable. Countries having no petroleum reserves will struggle. Better foreign policies might ease the struggle but even that will not help in long term due to changes in political situations. Thus, we need to explore other resources so that the impact of such situations will not cause much trouble.