Focus: GS-III Economic development
Why in news?
Oil prices surged by around 8% on 10th March 2020, a day after the biggest rout in nearly 30 years as investors eyed the possibility of economic stimulus and Russia signalled that talks with OPEC remained possible.
Joint Steps with Russia
- Russian Oil Minister Alexander Novak said he did not rule out joint measures with OPEC to stabilise the market, adding that the next OPEC+ meeting was planned for May-June.
- But in response, Saudi Arabia’s Energy Minister said he did not see a need to hold an OPEC+ meeting in May-June if there was no agreement on what steps should be taken to deal with the impact of the COVID-19 on oil demand and prices.
India and Oil Imports
- India is heavily dependent on crude oil and LNG imports with 82.8% import dependence for crude oil and 45.3% for natural gas/LNG.
- The net foreign exchange outgo is 63.305 billion US$ in the financial year 2017-18 on account of crude oil imports.
- India generated 35.2 million tons of petroleum products from indigenous crude oil production whereas the consumption of petroleum products is 204.9 million tons. Similarly India generated 31.7 bcm natural gas locally against the consumption of 58.1 bcm.
- LNG price is linked to the prevailing crude oil price in global markets.
- India is the third biggest oil importer after US and China in 2018 and expected to occupy second place surpassing the US in 2019.