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We are only as strong as we are united as weak as we are divided – this very famous phrase from harry potter and the goblet of fire explains the ongoing oil price war between Russia and Saudi Arabia . The Organisation of the petroleum exporting countries (OPEC) was all set to celebrate its 60th anniversary later this year , but now thanks to the ongoing oil price war , the world’s one of the most successful cartel is under the threat of disbandment.
Pandavas and Kauravas fought for 18 long days to take revenge of the insult faced by draupadi . The Rajputs and Mughals locked horns in the battle of Haldighati to safeguard their land . And now in 21st century , two countries with population of about 18 crore people are fighting over “OIL”.This three letter word has turned the world upside down , the time when the entire world needs to come together to defeat the deadly corona virus , Russia and Saudi Arabia have forgotten the essence of unity , they have forgotten that when spiders unite they can tie down a lion.
The Beginning:
As a result of the 2019–20 coronavirus pandemic, factory output and transportation demand fell, bringing overall demand for oil down as well, and causing oil prices to fall. On 15 February 2020, the International Energy Agency announced that demand growth would fall to the lowest rate since 2011, with growth falling by 325,000 barrels per day to 825,000 barrels per day, and a contraction in consumption by 435,000 barrels per day. Although demand for oil was falling globally, a drop in demand in China's markets, the largest since 2008, triggered an OPEC summit in Vienna on 5 March 2020. At the summit, OPEC agreed to cut oil production by an additional 1.5 million barrels per day through the second quarter of the year (a total production cut of 3.6 million bpd from the original 2016 agreement), with the group expected to review the policy on 9 June during their next meeting. OPEC called on Russia and other non-OPEC members of OPEC+ to abide by the OPEC decision.] On 6 March 2020, Russia rejected the demand,and initiated the THE OIL PRICE WAR.
Impact on India:
India is the world’s third-largest crude oil buyer and the fourth-largest liquefied natural gas importer.Every $10 fall in crude price helps India save $15 billion of external payment or 0.5% of GDP (gross domestic product). Hence, this massive fall in crude price will benefit India’s macro—current account deficit, fiscal deficit and inflation," said Debasish Mishra, leader, energy resources and industrial products at Deloitte in India.India’s choking economy has surely found some breathing space due to the bloody price war , in which both Russia and Saudi Arabia are in a competition to flood the market with cheap oil.
The Outcomes of the War:
An interesting question that pops in mind reading the above article is that who is likely to win this Oil price war – Russia led by its president Vladimir Putin or Saudi Arabia led forward by Prince Mohammad Bin Salman . Either Russia wins or Saudi Arabia , the ultimate looser of this war will be humanity . Both the countries are facing sever economic crisis as highlighted from their declining GDP but still none is ready to step behind , instead each nation is trying to defeat the other , This is the new face of humanity , where one finds happiness and joy by putting obstacles in the path of another.
This war has surely taught us one thing that humanity is being overpowered by the selfish needs of mankind . we need to realize that the light of unity is so powerful that it can illuminate the whole world
Written by - Siddhi Khandelwal
Edited by - Nidhi Verma
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