Over the years, several changes have been seen in global politics and economic activity. Since Donald Trump became President, there has been a change in tariffs and trade policies worldwide, causing many countries to improve their economic activities. Meanwhile, Gulf countries and countries with crude oil reserves have also become active in the region. Now, there is a possibility of flooding of petrol and diesel in the international market, which has not happened in the last decade.
A major cause of this change is an increase in oil production capacity of Iraq. Iraq has planned to increase its oil production more than 6 million barrels per day by 2029. In addition, the discovery of new oil reserves in countries such as Kazakhstan and Brazil will also increase oil supply. The US government is also planning to increase oil production through a drill baby drill project. Due to all these factors, crude oil prices are likely to decrease, which can also reduce petrol and diesel prices.
Global Oil Market Trends
Changes in oil market
Many significant changes have been seen in the oil market in recent years. OPEC+ countries have cut production, but now they are planning to increase production. Countries like Iraq and Saudi Arabia are increasing their production capacity. In addition, the US is also focusing on increasing its oil production.
Effect of increase in oil production
Increase in oil production is likely to reduce crude oil prices. This change will also affect the prices of petrol and diesel, which can reduce fuel prices. The table below gives details of the main points of this scheme:
| Description | Expansion of details |
| Iraq’s production target | Producing more than 6 million barrels per day by 2029. |
| New oil reserves | Search for new oil reserves in Kazakhstan and Brazil. |
| American project | Increase oil production through drill baby drill project. |
| Role of OPEC+ | Plan to increase production now after production cuts. |
| Crude oil prices | Production growth likely to reduce crude oil prices. |
| Petrol and diesel prices | Reduction in crude oil prices can also reduce petrol and diesel prices. |
| Impact on India | Decrease in India’s import bill and the possibility of improvement in value of rupee. |
Due to increase in oil production
There are many reasons for increase in oil production:
- Iraq’s plan: Iraq has launched several projects to increase its oil production. He has tied up with BP which will develop the Kirkuk oil and gas areas.
- New oil reserves: New oil reserves have been discovered in Kazakhstan’s Caspian Sea and Baklahaau region of Brazil, which will increase global oil supply.
- American Project: America is focusing on increasing oil production through its drill baby drill project.
- Policy of OPEC+: OPEC+ countries have now planned to increase production after cutting production.
Effect of oil production growth on India
India is the third largest oil importer in the world, and most of its imports are of crude oil. Reduction in oil prices will reduce India’s import bill, which can improve the value of the rupee. Apart from this, inflation figures can also be reduced due to lower fuel prices.
Petrol and diesel prices in India
Currently, petrol and diesel prices in major cities of India are as follows:
- Delhi: Petrol Rs 94.77 per liter, diesel Rs 87.67 per liter.
- Kolkata: Petrol Rs 105.01 per liter, diesel Rs 91.82 per liter.
- Mumbai: Petrol Rs 103.50 per liter, diesel Rs 90.03 per liter.
- Chennai: Petrol Rs 100.80 per liter, diesel Rs 92.39 per liter.
Benefits of reduction in oil prices
India can have many benefits due to reduction in oil prices:
- Reduction in import bill: India’s import bill will be reduced due to low crude oil prices.
- Improvement in value of rupee: Low import bill can improve the value of rupee.
- Reduction in inflation: Inflation figures can also be reduced due to lower fuel prices.
conclusion
It is clear from recent changes in the oil market that the prices of petrol and diesel can be reduced. The plans of Iraq, America, and OPEC+ countries will increase oil production, which will reduce crude oil prices. This change can be beneficial for import dependent countries like India, as it will reduce their import bill and improve the value of the rupee.
feature points
- Global Supply Chain: Global supply chain can improve the increasing supply of oil.
- Economic Impact: Low oil prices can also improve economic growth.
- Environmental concerns: Excess oil production can also increase environmental concerns.
Source:
