Oil Prices May Get Dearer As OPEC Mulls Biggest Production Cut Since Pandemic

India, importing about 85 per cent of its total crude requirements from OPEC countries, is only behind the United States and China in terms of the quantity being imported.

New Delhi: The Organization of the Petroleum Exporting Countries (OPEC) is said to be moving for the biggest cut in oil production since the pandemic, and that’s no good news for major oil consuming countries like India.

It has been reported that the OPEC oil cartel and its allies, including Russia, will consider cutting output by more than 1 million barrels per day (bpd) at a meeting in Vienna on Wednesday. Oil prices jumped over $4 on Monday following media reports that cited insiders revealing the possible production cut.

OPEC is an inter-governmental organisation of 14 major oil producing nations that combinedly produce about 40 per cent of the world’s crude oil. India, importing about 85 per cent of its total crude requirements from OPEC countries, is only behind the United States and China in terms of the quantity being imported.

Starting June, oil prices have tumbled for four straight months because of a variety of reasons China’s stringent lockdowns and the havoc being created in the global financial markets by a surging US Dollar. In order to support the oil prices, OPEC and its allies — together known as OPEC+ — is considering this production cut. This proposed production cut by more than 1 million bpd doesn’t include additional voluntary cuts by individual members, a source told Reuters.