OPEC+ (Syllabus: GS Paper 2 – IR)

News-CRUX-10     14th September 2023        
Samadhaan

Context: Recently, India has expressed concerns over Russia's consistent reduction in crude production, even affecting assets involving Indian state-run firms, as part of its efforts to comply with the OPEC+ agreement.

  • The Russians have decreased production in alignment with OPEC+, but it's important to note that India is not a participant in this agreement.
  • India, which imports over 80% of its oil needs, has experienced a rise in oil prices due to production cuts, making it susceptible to potential impacts on its import bill, inflation, and trade deficit with any global price increases.

OPEC

  • About: It is a permanent, intergovernmental organization of 13 countries, created at the Baghdad Conference in 1960, by Iran, Iraq, Kuwait, Saudi Arabia, and Venezuela.
  • Headquarter: Vienna, Austria.
  • Aim: To regulate oil supply with the aim of stabilizing the global oil price, thus preventing volatility that could negatively impact the economies of both oil-producing and oil-importing nations.

OPEC+

  • About: It is a group of 23 oil-exporting countries which meets regularly to decide how much crude oil to sell on the world market.
  • Aim: To work together on adjusting crude oil production to bring stability to the oil market.
  • At the core of this group are the 13 members of OPEC (the Organization of the Oil Exporting Countries), which are mainly Middle Eastern and African countries.
  • Members: 13 members of OPEC (Saudi Arabia, the UAE, Iran, Iraq, Kuwait, Algeria, Angola, Equatorial Guinea, Gabon, Libya, Nigeria, the Republic of the Congo, and Venezuela) and 10 other oil-producing countries (Russia, Azerbaijan, Bahrain, Brunei, Kazakhstan, Malaysia, Mexico, Oman, South Sudan and Sudan).
  • Russia, a major oil producer surpassing even Saudi Arabia, holds a pivotal position alongside OPEC in shaping worldwide crude oil price trends.

Samadhaan