Oil politics and why India has no reason to worry

 At present, the biggest oil producers in the world are Russia, Saudi Arabia and the US.

But there is not enough immediate purchasers for the major oil producers who have not stopped their oil production since September 2014.
So, they are only stocking their production due to lack of demand.
The recent Qatar episode has worsened the situation more because it is world’s largest LNG supplier, and lately, with the help of Iran it has increased production.
The Ukraine episode was an accelerator for the whole scenario. Things started changing drastically after this. The United States could sense the vision and boldness of Russian President Vladimir Putin. Saudi Arabia was also very upset by the episode.
The United States, in a planned way with the help of the European countries, put too many economic sanctions on oil export.
Russian economy has always been very dependent on oil. They are also stocking their oil production hoping that the sanction may be lifted.
The US oil industry experienced a boom through fracking (the process of injecting liquid at high pressure into subterranean rocks, boreholes, etc. so as to force open existing fissures and extract oil or gas)
Earlier, Saudi Arabia was the biggest oil producer. But it lost its dominance owing to the heavy production of the US and Russia.
In an attempt to resurrect its lost position, Saudi Arabia has refused to cut its production despite falling prices.
On the other hand, the Unites States has lifted sanction on Iran, another major oil producer. Iran returned to the market with full capacity, and its production will increase 1 million per day.
As the fracking technology gets cheaper, the output will continue to expand and price of crude will fall.
So, all these indicators are quite enough to reach the conclusion that there will be no increase in oil prices in coming three to four years.
It’s going to be a big boon for Indian economy, which is looking for a big leap.
India is looking forward for 8 to 9 per cent growth and oil plays an important role in our growth.

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Oil and Gas