For India, OPEC still holds the trump card

NEW DELHI, Nov 8: US president Donald Trump on Wednesday claimed credit for beating down global oil prices and busting the monopoly of OPEC, the grouping of oil exporting countries.
“If you look at oil prices, they’ve come down very substantially over the last couple of months. That’s because of me. Because you have a monopoly called OPEC, and I don’t like that monopoly,” Trump said in a White House interview.
He did not say why he deserved the credit for the recent drop in oil prices, glossing over the market forces that have knocked off oil from four-year highs and could again spark a price rally as the picture over shipments from Iran become clearer in the days to come.
Notwithstanding Trump’s assertion, OPEC still holds sway over prices as it meets 40% of the world’s oil needs. For India, the grouping’s member countries account for 82% of oil, 75% of natural gas and 97% of LPG (domestic cooking gas) supplies.
Trump may like to project himself as the global ‘Oil Marshal’ with his OPEC bashing but his administration actually depends on the cartel, particularly the grouping’s de-facto leader Saudi Arabia, to offset the impact of its Iran policy. It has often leaned on Saudi Arabia to influence OPEC to raise output to calm oil prices.
No doubt the grouping faces challenge from a rising US production, with latest figure suggesting more than combined production of Saudi Arabia and Russia at over 11 million barrels a day. But cost shipping oil from the US limits its effectiveness as replacement of OPEC supplies, at least majorly for major Asian consumers such as India and China. There are rifts within the grouping too, which are embedded in the West Asina regional politics. (Agencies)