India, the world’s third-biggest oil importer, has said that the decision by major producers to continue with output cuts as prices move higher could threaten the consumption led-recovery in some countries.

Try this PYQ:

Q.The term ‘West Texas Intermediate’, sometimes found in news, refers to a grade of

(a) Crude oil

(b) Bullion

(c) Rare earth elements

(d) Uranium

What is the news?

• The Organization of the Petroleum Exporting Countries (OPEC) and its allies, a group known as OPEC+, agreed not to increase supply in April as they await a more substantial recovery in demand amid the COVID-19.
• Crude prices rose after the announcement and are up 33% this year (meanwhile India flaring up prices to 100 Rs/litres for Petrol).

What is OPEC+?

• The non-OPEC countries which export crude oil along with the 14 OPECs are termed as OPEC plus countries.
• OPEC plus countries include Azerbaijan, Bahrain, Brunei, Kazakhstan, Malaysia, Mexico, Oman, Russia, South Sudan, and Sudan.
• Saudi and Russia, both have been at the heart of a three-year alliance of oil producers known as OPEC Plus — which now includes 11 OPEC members and 10 non-OPEC nations — that aims to shore up oil prices with production cuts.

Concerns for India

• Rising oil prices are posing fiscal challenges for India, where heavily-taxed retail fuel prices have touched record highs, threatening the demand-driven recovery.
• India imports about 84% of its oil and relies on West Asian supplies to meet over three-fifths of its demand.
• As one of the largest crude-consuming countries, India is concerned that such actions by producing countries have the potential to undermine consumption-led recovery.
• This would hurt consumers, especially in our price-sensitive market.

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