Oil

Given that Iran accounts for around 10 per cent of India total oil imports, the immediate factor for New Delhi will be to look at various options to deal with the situation without jeopardising its energy security.

President Trump’s decision to withdraw from the Iran nuclear deal has sent oil prices soaring again. Even prior to the May 8, 2018 announcement, after falling to below $30 a barrel in early 2016, oil prices were on the boil again, belying the projections of market analysts, including those of the respected International Energy Agency (IEA), that the era of $100 plus per barrel of oil was over. The projections were based on the assumption that nations would move increasingly away from oil—and coal—to meet their carbon mitigation commitments under the Paris Agreement.

Despite the easing of international crude prices, the central government is unlikely to cut central excise duties since a cut of Re 1 would result in a loss of revenue of Rs. 10,725 crore.

China’s launch of a yuan-denominated oil futures exchange will provide it with the opportunity to create an Asian crude oil benchmark and give it more clout in crude pricing and for promoting the yuan as a truly global currency.

The Food and Agricultural Organization (FAO) has proposed that the terms of the debate be moved from food versus fuel to food and fuel.

Crown Prince Salman has been using oil as a tool to further his political ambitions both domestically and internationally, and Saudi Aramco acts as a nucleus around which his ambitions revolve.

The contentious discourse in the media ignores the implications of state taxes on rising fuel prices.

If India gets a stake in the proposed Aramco IPO, it would mean getting a share of profits from one of the world’s largest and most profitable companies.

Although President-elect Trump has declared his intention to deregulate the fossil fuel sector in order to make America less energy import dependent, but over time, this will lead to an increase in supplies in an already over-supplied oil (and gas) market and send prices into a further downward spiral.

Over the last few years, it has been a roller coaster ride for the oil markets. From $110 a barrel in 2010, prices began dropping from June 2014 and finally dropped to below $30 a barrel in January 2016. Then from the end of the first quarter of 2016, prices started recovering and have been hovering around $50 a barrel since May