The OPEC+ alliance of oil-exporting countries recently decided to drastically cut its oil production by two million barrels in order to “boost prices”. The decision may have a negative impact on consumers, businesses, and entire economies of several countries, including India, one of the major buyers. However, the Union Minister of Petroleum and Natural Gas of India, Hardeep Singh Puri, stated that Indian government has a moral obligation to provide energy to its citizens and will therefore buy oil from wherever it wants to. “If you are clear about your policy, which means you believe in energy security and energy affordability, you will buy from wherever you have to purchase energy from sources,” he further added.
On October 5, 2022, the OPEC+ alliance of oil-exporting countries had their first in-person meeting since the start of the COVID-19 pandemic, at the oil cartel’s headquarters in Vienna. The coalition decided to drastically cut its oil production by two million barrels, effective by November, in order to “boost prices”. The decision, according to the group, was based on the “uncertainty that surrounds the global economic and oil market outlooks”.
Since OPEC+ members already fall short of their quotas, the production cuts on oil prices and consequently, the price of gasoline derived from crude will be somewhat constrained. In lieu of the ongoing Ukraine crisis, the decision would also benefit alliance member Russia, whose gas supplies to Europe have been significantly reduced as a result of sanctions.
However, this step by OPEC has angered the Biden administration as it is seen as a rebuff to the US, especially with mid-term US congressional elections coming up in November.
The decision may also potentially have a negative impact on consumers, businesses, and entire economies of several countries, including India, one of the major buyers.
Following the OPEC decision, the Union Minister of Petroleum and Natural Gas of India, Hardeep Singh Puri, recently held a bilateral meeting with the US Energy Secretary, Jennifer Granholm and stated that the Indian government has a moral obligation to provide energy to its citizens and will therefore buy oil from wherever it wants to. Responding to a question, he stated India has not been told by anyone to stop buying oil from Russia. “If you are clear about your policy, which means you believe in energy security and energy affordability, you will buy from wherever you have to purchase energy from sources,” he further added. To highlight this point, India`s purchases of oil from Russia have increased 50-fold since April and at the same time, its purchases from the US, the world’s largest oil producer, have reached US$20 billion.
In this meeting, the two sides also encouraged the idea of opening a “GREEN CORRIDOR” between the countries, as Minister Puri spoke of the turbulence and volatility in the markets and a need to divert to more green, clean, sustainable energy. Despite being bullied by world powers, India, for its national interests, will continue to play its role as a sovereign nation and pursue policies that are favorable to the country and beneficial to its people.
