The crude prices have been increasing and India is looking for alternatives to cool down the crude prices.
· India is the third-largest oil consuming nation. It imported 227 million metric tonnes of crude oil in 2019-20 thereby increasing its oil import bill to Rs. 8.43 trillion from Rs. 5.42 trillion in 2016-17.
· India depends on OPEC nations for its crude imports. It is the largest buyer of crude oil from the OPEC+ grouping, with 83% of its oil imports coming from OPEC.
· OPEC+ countries are home to around 79.4% of the world’s oil reserves with a capacity of 1,189.80 billion barrels.
· Whereas, non OPEC countries consist of 308.38 billion barrels, which is 20.6%.
· Amongst the OPEC countries, the crude from Oman, Dubai and Brent crude are the most suitable for Indian refineries.
· However, after the US imposed sanctions on Iran, Iranian crude has been replaced by US crude. · Reasons for dependence on OPEC+ for crude:
- Geographical proximity and less delivery time compared to other countries.
- Steady supply
- Promised delivery, unlike the non-OPEC countries.
· Soaring crude prices have made India look for alternatives outside the OPEC.
· Since, India currently ranks 25th among the top 30 oil producing countries and in order to reduce its dependence on OPEC nations for oil, it should focus on increasing its hydrocarbon exploration and production and creating infrastructure such as ports and pipelines, as well as increasing its ship fleets.
· It should also invest in other countries for building capacities.
Organisation of Petroleum Exporting Countries (OPEC)
· OPEC is a permanent intergovernmental organization of 13 oil-exporting developing nations that coordinates and unifies the petroleum policies of its Member Countries.
· Founder Members of the Organization: Republic of Iran, Iraq, Kuwait, Saudi Arabia and Venezuela.
· Any country with a substantial net export of crude petroleum, which has fundamentally similar interests to those of Member Countries, may become a Full Member of the Organization.
