OPEC+ on ‘Crude Oil Supply’
- The latest round of meetings among the OPEC+ group of oil-exporting countries has stalled as the UAE has pushed back proposals making an increase in crude oil supply conditional on an extension to an output agreement.
- Another round of discussions between OPEC+ countries scheduled was reportedly called off as key players failed to make any progress in resolving key issues.
- The OPEC+ group of countries had, in April 2020, entered into a two-year agreement, which entailed steep cuts in crude production to deal with a sharp fall in the price of oil as a result of the Covid-19 pandemic.
- The price of Brent crude hit an 18-year low of under $20 per barrel in April 2020.
- The initial production cut by OPEC+ was about 10 million barrels per day or about 22% of the reference production of OPEC+ nations.
- In November 2020, however, the price of Brent crude started climbing consistently and has, now, risen to
$76.5 per barrel buoyed by the steady rollout of vaccination programmes around the world.
- OPEC+, however, maintained lower levels of production despite crude oil prices reaching pre-Covid levels, with Saudi Arabia, notably, announcing a further cut in production of 1 million barrels per day for the February-to-April period, which helped boost rising prices even further.
- The OPEC+ group ran into sharp criticism from developing economies, including India, for deliberately maintaining low supply levels to raise prices.
- In April, OPEC+ agreed to gradually increase crude production as prices reached $64.5 per barrel including a phased end to Saudi Arabia’s 1 million barrel per day cut in production by July.
- UAE agreed that there was a need to increase crude oil production from August, but did not agree to a condition by the OPEC Joint Ministerial Monitoring Committee (JMMC) that the two-year production agreement be extended by six months.
- The UAE’s key objection to the existing agreement is the reference output used to calculate the total production apportioned to each oil-exporting country.
- It that the baseline production level reference used in the current agreement was not reflective of the UAE’s production capacity and, therefore, led to the UAE being apportioned a lower share of total production of crude oil.
Impact on India
- If the UAE and other OPEC+ nations do not reach an agreement to increase production in August, expected relief in the form of lower crude oil prices could be delayed.
- Oil prices climbed to multi year highs on Tuesday after OPEC+ producers clashed over plans to raise supply to meet rising global demand.
- Brent crude hit a session high of $77.84, a level not seen since October 2018, be fore losing momentum and easing to trade 25 cents, or 0.3% lower, at $76.91 a barrel by 1149 GMT.
- India is currently facing record-high prices of petrol and diesel, with pump prices of the former exceeding Rs 100 per liter in 13 states and Union Territories. High crude prices have led to Indian oil marketing companies hiking the price of petrol by about 19.3% and that of diesel by about 21% since the beginning of 2021.
- The Organization of the Petroleum Exporting Countries (OPEC) was founded in Baghdad, Iraq, in September 1960 by five countries namely Islamic Republic of Iran, Iraq, Kuwait, Saudi Arabia and Venezuela. They were to become the Founder Members of the Organization.
- These countries were later joined by Qatar (1961), Indonesia (1962), Libya (1962), the United Arab Emirates (1967), Algeria (1969), Nigeria (1971), Ecuador (1973), Gabon (1975), Angola (2007), Equatorial Guinea (2017) and Congo (2018).
- Ecuador suspended its membership in December 1992, rejoined OPEC in October 2007, but decided to withdraw its membership of OPEC effective 1 January 2020. Indonesia suspended its membership in January 2009, reactivated it again in January 2016, but decided to suspend its membership once more at the 171st Meeting of the OPEC Conference on 30 November 2016. Gabon terminated its membership in January 1995. However, it rejoined the Organization in July 2016. Qatar terminated its membership on 1 January 2019.
- This means that, currently, the Organization has a total of 13 Member Countries.
- The Statute further provides for Associate Members which are those countries that do not qualify for full membership, but are nevertheless admitted under such special conditions as may be prescribed by the Conference.
- The OPEC Secretariat of the OPEC located in Vienna.
- OPEC+ controls over 50% of global oil supplies and about 90% of proven oil reserves.
The non-OPEC countries (10) which export crude oil are termed as OPEC Plus countries. OPEC Plus countries include:
- South Sudan
- This means in short that the countries that export crude oil apart from OPEC countries are called OPEC +.
- The OPEC and non-OPEC producers first formed the alliance at a historic meeting in Algiers in 2016.
|The Secretariat was originally established in 1961 in Geneva, Switzerland. In April 1965, the 8th (Extraordinary) OPEC Conference approved a Host Agreement with the Government of Austria, effectively moving the Organization’s headquarters to the city of Vienna on September 1, 1965.|
Source: Indian Express
Grand Ethiopian Renaissance Dam
- Ethiopia has started the second phase of ﬁlling a mega dam’s reservoir on the upper Blue Nile.
- The Nile — which at some 3,700 miles (6,000 kilometers) is one of the longest rivers in the world — is an essential source of water and electricity for dozens of countries in East Africa.
- The Grand Ethiopian Renaissance Dam (GERD), formerly known as the Millennium Dam, is under construction in the Benishangul-Gumuz region of Ethiopia, on the Blue Nile River, which is located about 40km east of Sudan.
- The huge dam is set to be Africa’s largest hydroelectric project when completed.
- The project is owned by Ethiopian Electric Power Corporation (EEPCO).
- It has sparked an almost decade-long diplomatic stand-off between Ethiopia and downstream nations Egypt and Su- dan.
- Ethiopia says the project is essential to its development, but Egypt and Sudan fear it could restrict their citizens’ water access.
- Egypt, which depends on the Nile for about 97% of its irrigation and drinking water, sees the dam as an existential threat.
- Sudan hopes the project will regulate annual flooding but fears its dams would be harmed without agreement on its operation.
Source: The Hindu
Location of Okhotsk Sea
- Wreckage from a plane that went missing in Russia’s Far East region of Kamchatka was found.
- An Antonov An26 plane with 22 passengers and six crew members, ﬂying from the city of PetropavlovskKamchatsky to the town of Palana on the Okhotsk Sea coast, missed a scheduled communication and disappeared from radar as it was on approach for landing.
Source: The Hindu
Open Network for Digital Commerce
- The Department for Promotion of Industry and Internal Trade (DPIIT) issued orders appointing an advisory committee for its Open Network for Digital Commerce (ONDC) project.
- It is aimed at curbing “digital monopolies”. This is a step in the direction of making e-commerce processes open source, thus creating a platform that can be utilised by all online retailers.
What processes are expecting to be open-sourced with this project?
- Several operational aspects including onboarding of sellers, vendor discovery, price discovery and product cataloguing could be made open source on the lines of Unified Payments Interface (UPI).
- This could be problematic for larger e-commerce companies, which have proprietary processes and technology deployed for these segments of operations.
Significance of making something open-source
- Making a software or a process open-source means that the code or the steps of that process is made available freely for others to use, redistribute and modify it.
- For example, while the operating system of Apple’s iPhones iOS is closed source, meaning it cannot be legally modified or reverse engineered.
- Google’s Android operating system is open-source, and therefore it is possible by onboarding OEMs such as Samsung, Xiaomi, One Plus, etc to modify it for their hardware.
- If the ONDC gets implemented and mandated, it would mean that all e-commerce companies will have to operate using the same processes.
- This could give a huge booster shot to smaller online retailers and new entrants.
Aim of the project
- In the order forming the council, the DPIIT noted that the ONDC “aims at promoting open networks developed on open- sourced methodology, using open specifications and open network protocols, independent on any specific platform. ONDC is expected to digitise the entire value chain, standardise operations, promote inclusion of suppliers, derive efficiency in logistics and enhance value for consumers”.
Source: Indian Express
Bandits of Nigeria
- In northern Nigeria’s Kaduna state, more than 150 students are missing after armed men raided a boarding school there. This is the 10th such attack and mass kidnapping of children since December 2020.
- The most recent case of mass kidnapping has been attributed to an armed group of bandits. These operate in Nigeria’s northwest.
Who are these bandits in Nigeria?
- Mass kidnappings of school children are not unique to groups of bandits. In 2014, the Islamist group Boko Haram, which launched a rebellion against the Nigerian government in 2009, kidnapped nearly 300 girls from another boarding school in Chibok.
- About a decade since, Boko Haram, or Jama’a Ahl as-Sunnah Li-da’wawa-al Jihad has spread from northeast Nigeria to the neighboring west African nations of Niger, Chad and Cameroon. The group rejects western education, which it believes to be un-Islamic.
- ·But armed banditry is a more recent problem and security challenge facing the Nigerian government..
- Populations in northwest Nigeria have been facing the ever increasing threat of banditry, which is defined as a type of organised crime that includes kidnapping, armed robbery, murder, rape, cattle-rustling and the exploitation of environmental resources.
How did this start?
- Groups of bandits started operating in 2011 “as a reflection of violent competition for scarce resources”, of mainly farmers and herders. The situation was further aggravated because most herders belonged to different communities.
- When environmental changes caused land and water to become more valuable than before, there was a competition for them between different communities. Over the last one decade or so, this rivalry that was limited to being communal evolved into “lethal militia groups”.
- Now, some people see banditry as a source of income as well, considering that the area where bandits are mostly active suffers from several problems, including youth unemployment, poverty and inequality.
- There are some other factors too, such as “the proliferation of small arms and light weapons, illicit artisanal mining”.
- The problem is exacerbated by the demoralised security forces who have been deployed in all but one out of 36 Nigerian states.
- While governors of some states have tried to negotiate with the bandits, the talks have so far been unsuccessful, partly because the bandits broke the terms of agreements.
Source: Indian Express
White Flag Campaign
- Malaysia, some residents of low-income families have started waving white flags as part of the so-called “White Flag Campaign”, or the #benderaputi (white flag) movement.
- They are doing this to convey distress about the financial crunch they have had to deal with amid the lockdowns due to Covid-19.
What is this movement?
- As part of the movement that was initiated last week, families that are facing hunger or need any other kind of assistance are encouraged to wave a white flag or put a piece of white cloth outside their homes to signal that they need help. The idea is that by spotting the white flag, neighbors and good samaritans can reach them.
- Alongside the white flag movement, there is the black flag movement as well, in order to express dissatisfaction with the Malaysian government. Specifically, this movement is demanding that Prime Minister MuhyiddinYassin resign.
|On the Sambal SOS app, which was initially called the BenderaPutih app, people can see the map of Malaysia where active food banks are marked. This is to help people easily track down food banks. Some fishermen from Penang are also helping out the community by handing over fresh fish to families in need.|