India to cut reliance on Middle East Oil After OPEC+ Decision

Context

Centre has asked state refiners to speed up the diversification of oil imports to gradually cut their dependence on the Middle East after OPEC+ decided to largely continue production cuts in April.

Organization of the Petroleum Exporting Countries

• It is a cartel which was created as a permanent intergovernmental organization in conformity with the Resolutions of the Conference of the Representatives of the Governments of Iran, Iraq, Kuwait, Saudi Arabia and Venezuela in 1960
• The principal aim of OPEC is the coordination and unification of the petroleum policies of Member Countries and the determination of the best means for safeguarding their interests, individually and collectively
• The Organization devises ways and means of ensuring the stabilization of prices in international oil markets with a view to eliminating harmful and unnecessary fluctuations.
• Any other country with a substantial net export of crude petroleum may become a Full Member of the Organization, if accepted by a majority of three-fourths of Full Members, including the concurrent vote of all Founder Members
• The current OPEC members are: Algeria, Angola, Equatorial Guinea, Gabon, Iran, Iraq, Kuwait, Libya, Nigeria, Republic of Congo, Saudi Arabia, United Arab Emirates and Venezuela.
• 9% of crude oil reserves were held by OPEC countries in 2019.
• Former OPEC members are Ecuador, Indonesia and Qatar.

OPEC+

• In addition to the OPEC members, the 10 additional oil exporting countries, led by Russia, are grouped as OPEC+ cartel from the year 2016 as they cooperate with OPEC members in fixing the global crude oil prices by agreeing to the production quotas.
  
  

The matter

• Most of the OPEC+ producers, led by world's top exporter Saudi Arabia, recently decided to extend most output curbs into April.
• India, hit hard by the soaring oil prices, has urged producers to ease output cuts and help the global economic recovery.
• In response, the Saudi energy minister told India to dip into strategic reserves filled with cheaper oil bought last year.

India’s concern

• India, the world's third biggest oil importer and consumer.
• The country imports about 84% of its overall crude needs with over 60% of that coming from Middle Eastern countries, which are typically cheaper than those from the West.