List of ContentsSource: The Hindu
List of Contents
Relevance: Developments of OPEC are important for India due to its dependency on oil.
Synopsis: The OPEC deal to step up crude production will ease rising prices and balance domestic and global priorities.
- OPEC+ will now step up crude production by 400,000 barrels a day starting in August. The deal will extend until the end of 2022.
- Thus, while the internal rift has been resolved, for now, the danger cannot be ruled out in the future given the increasingly economically and politically assertive UAE.
Significance of increasing oil production by OPEC+ countries
- The latest OPEC compromise echoes growing recognition of the delicate balance between competing domestic and global priorities.
- It will also help OPEC+ countries to maximize the returns on their substantial hydrocarbon resources, amid growing speculation of a peak in oil demand within sight.
Concerns for OPEC bloc
- Strict implementation of the Paris climate accord could result in oil demand to peak by 2030, owing to the proliferation of alternative fuels and electric cars.
- Diversification of economies in anticipation of the unfolding global energy transition.
- OPEC’s other concerns are the stabilization of world oil prices without jeopardizing national expenditure programs.