India has nudged Russia to use its influence on oil suppliers cartel OPEC to balance the global oil market, ensuring adequate supply with responsible and reasonable price. Oil Minister Dharmendra Pradhan, on a three-day visit to Moscow, met his Russian counterpart Alexander Valentinovich Novak to review “the entire spectrum of oil and gas cooperation,” Pradhan said.
 
 
What
  1. India, the world’s third-biggest oil consumer, has been pressing the Organisation of Petroleum Exporting Countries (OPEC) for responsible pricing of oil and gas, saying the volatility in rates are far detached from market fundamentals and are hurting importing nations.
  2. Russia is collaborating with the OPEC in fixing oil production quota with a view to controlling the prices. “Discussed with Minister Novak about the price volatility in the global oil market that is hurting the interests of both consuming and producing nations. 
  3. Also conveyed our expectation that Russia, as a member of the OPEC Plus, can play an important role in balancing global oil market both in terms of ensuring adequate supply as well as in having a responsible and reasonable price.
  4. India imports over 83 per cent of its crude oil needs. Of the total crude oil imported, about 85 per cent of comes from OPEC nations. Also, 80 per cent of gas imports come from those countries. 
  5. India believes OPEC has a major role in shaping oil prices and availability, and the current high oil prices dent economic development of many countries as well as threaten already fragile world economic growth.
  6. He also sought Russian investment in Indian oil and gas exploration and production (E&P), oil refining, petrochemicals and LNG import facilities. 
  7. Energy-hungry India is keen on sourcing one million barrels per day of oil and oil-equivalent gas from Russia and had identified Sakhalin-3 in the Far East, Vankor in East Siberia, and Terbs and Titov oilfields in Timan Pechora region as fields for potential collaboration. But, it has so far been unsuccessful in its attempts.
  8. OVL already has 20 per cent stake in Sakhalin-1 oil and gas field in Far East Russia, and in 2009 acquired Imperial Energy, which has fields in Siberia for USD 2.1 billion. Russia is wooing Indian investments in its Far East region ahead of Modi’s Vladivostok visit to balance China’s expanding presence in the resource-rich region.
Flashback
  1. The Organization of the Petroleum Exporting Countries (OPEC) is a permanent, intergovernmental Organization, created at the Baghdad Conference on September 10–14, 1960, by Iran, Iraq, Kuwait, Saudi Arabia and Venezuela
  2. The five Founding Members were later joined by ten other Members: Qatar (1961) – terminated its membership in January 2019; Indonesia (1962) – suspended its membership in January 2009, reactivated it in January 2016, but decided to suspend it again in November 2016; Libya (1962); United Arab Emirates (1967); Algeria (1969); Nigeria (1971); Ecuador (1973) – suspended its membership in December 1992, but reactivated it in October 2007; Angola (2007); Gabon (1975) - terminated its membership in January 1995 but rejoined in July 2016; Equatorial Guinea (2017); and Congo (2018). 
  3. OPEC had its headquarters in Geneva, Switzerland, in the first five years of its existence. This was moved to Vienna, Austria, on September 1, 1965.
  4. OPEC's objective is to co-ordinate and unify petroleum policies among Member Countries, in order to secure fair and stable prices for petroleum producers; an efficient, economic and regular supply of petroleum to consuming nations; and a fair return on capital to those investing in the industry.

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