OPEC+

OPEC+

Subject: International Relations

Context: The latest round of meetings among the OPEC+ group of oil-exporting countries has stalled as the UAE has pushed back proposals making an increase in crude oil supply conditional on an extension to an output agreement.

Concept:

• The non-OPEC countries which export crude oil are termed as OPEC Plus countries. OPEC Plus countries include Azerbaijan, Bahrain, Brunei, Kazakhstan, Malaysia, Mexico, Oman, Russia, South Sudan and Sudan.
• The OPEC and non-OPEC producers first formed the alliance at a historic meeting in Algiers in 2016.
• OPEC’s 14 members control 35 percent of global oil supplies in addition to the 82 percent of proven reserves.
• The addition of 10 Non-OPEC countries as OPEC+ including various important countries like Russia, Mexico and Kazakhstan, the share has increased to 55 percent and 90 percent of the holdings respectively. This provides OPEC+ a greater level of influence over the world economy than OPEC countries.

Concern

• The OPEC+ group ran into sharp criticism from developing economies, for deliberately maintaining low supply levels to raise prices.
• OPEC+ agreed to gradually increase crude production as prices reached $64.5 per barrel including a phased end to Saudi Arabia’s 1 million barrel per day cut in production by July.

Impact on India

• If the UAE and other OPEC+ nations do not reach an agreement to increase production in August, expected relief in the form of lower crude oil prices could be delayed.
• High crude prices have led to Indian oil marketing companies hiking the price of petrol by about 19.3 per cent and that of diesel by about 21 per cent since the beginning of 2021.