OPEC for Modest Oil Production Curbs [ Current Affairs - International Relations ]
The OPEC (Organisation of Petroleum Exporting Countries) agreed on modest oil production curb for the first time since 2008 after an informal meeting in Algiers, Algeria. This is the first OPEC deal in eight years.
- After two and a half years, OPEC reached consensus to manage the market. Agreement to reduce output to a range of 32.5 to 33.0 million barrels per day (bpd). OPEC estimated current output is at 33.24 million bpd. In the extreme case the reduction would be around 700,000 bpd.
- Each countries share in reduction to be decided at the OPEC’s next formal meeting. Next OPEC meeting would be on November 2016.
- Russia is a non OPEC member- special invitation to be sent to Russia to join cuts
Impact on India
- India is the third largest importer of crude oil- imports around 85 % of total oil and 95% of natural gas from OPEC nations.
- Indian economy had benefited because of lower oil prices in international market and overproduction and non-coordination among OPEC countries in recent time.
- Decision can thus have implications for the India’s current account shortage and overall economy in general.
- Lower oil prices keep the Indian economy on fast-track growth path- keep inflation under control and fuel and infrastructural spending high.
About OPEC (Organisation of Petroleum Exporting Countries)
- Intergovernmental organisation of 14 oil exporting developing nations.
- Mission is to coordinate the policies of the oil- pricing countries to secure a stable income for member states at the same time secure supply of oil to the consumers.
- 14 OPEC countries account for an estimated 43% of global oil production and 73% of the world’s oil reserves.
Established: 1960 in Baghdad
Headquarters: Vienna, Austria
- Algeria, Angola, Libya, Nigeria and Gabon (from Africa)
- Indonesia, Iran, Iraq, Saudi Arabia (the de facto leader) Kuwait, Qatar, United Arab Emirates (from Asia)
- Ecuador and Venezuela (from Latin America)
- Published on: October 3, 2016