Govt seeks ‘affordable’ price , production cut phase – out from OPEC

Govt seeks ‘affordable’ price, production cut phase – out from OPEC

Subject : International Organisations

Context : With domestic retail fuel prices soaring to record high on rising global oil rates, India on Thursday asked oil cartel OPEC for ‘affordable’ oil price within a ‘reasonable band’ and that the producers should phase out production cuts.

Concept :

• OPEC nations such as Saudi Arabia have mostly been India’s principal oil source. But, OPEC and its allies — called OPEC+ — ignoring its call for ease supply curbs had led to the world’s third-biggest oil importer tap newer sources to diversify its crude oil imports.
• As a result, OPEC’s share in India’s oil imports has dropped to about 60 per cent in May from 74 per cent in the previous month.

About OPEC

• The Organization of the Petroleum Exporting Countries (OPEC) was founded in Baghdad, Iraq, with the signing of an agreement in September 1960 by five countries namely Islamic Republic of Iran, Iraq, Kuwait, Saudi Arabia and Venezuela.
• They were to become the Founder members of the Organization.
• As of 2020, OPEC has a total of 13 Member Countries viz. Iran, Iraq, Kuwait, United Arab Emirates (UAE), Saudi Arabia, Algeria, Libya, Nigeria, Gabon, Equatorial Guinea, Republic of Congo, Angola and Venezuela are members of OPEC.
• OPEC’s objective is to co-ordinate and unify petroleum policies among member Countries, in order to secure fair and stable prices for petroleum producers; an efficient, economic and regular supply of petroleum to consuming nations; and a fair return on capital to those investing in the industry.
• It is head quartered in Vienna, Austria.
• OPEC membership is open to any country that is a substantial exporter of oil and which shares the ideals of the organization.

OPEC +

• OPEC+ is the alliance of crude producers undertaking corrections in supply in the oil markets since 2017.
• OPEC plus countries include Azerbaijan, Bahrain, Brunei, Kazakhstan, Malaysia, Mexico, Oman, Russia, South Sudan and Sudan.