12/4/2018 279 Geography | Energy | View Recent Current Affairs
- India will host the 16th International Energy Forum Ministerial (IEF—16).
- The ministerial comes in the backdrop of a supply cut by the Organization of the Petroleum Exporting Countries (Opec) and Russia that has led to a rally in global oil price. This has resulted in the cost of Indian basket of crude, which averaged $47.56 a barrel in 2016-2017, touching $63.80 (average price) in March 2018. The Indian basket represents the average of Oman, Dubai and Brent crude.
- The ministerial hosted by India assumes significance given that the country’s energy needs are primarily met through imports, with India importing 214 million tonnes of crude oil in 2016-17.
- India, the world’s fourth-largest liquefied natural gas (LNG) importer, has been trying to leverage the glut in global LNG supplies to renegotiate its contracts. Indian firms have been exploring strategies such as time swap of volumes, destination swaps and contract on free on board basis to reduce the final fuel price. India imported 19 million metric tonnes of LNG in 2016-17.
- Also, India has been recalibrating its crude sourcing strategy and sourcing heavy crude from Latin America as part of its strategy to become a preferred refining hub. It also sourced crude oil from US last year.
- As a major consumer, India is trying to leverage its position to seek reasonable rates. India is also reworking its import strategy by stepping up the share of short-term contracts whenever the market is favourable and exploring long-term supply deals at discounted prices as its new energy architecture evolves.
About International Energy Forum Ministerial(IEF):
- The IEF aims to foster greater mutual understanding and awareness of common energy interests among its 75 member countries.
- Covering all six continents and accounting for around 90% of global supply and demand for oil and gas, the IEF is unique in that it comprises not only consuming and producing countries of the IEA and OPEC, but also Transit States and major players outside of their memberships, including Argentina, China, India, Mexico, Oman, Russia and South Africa.
- Recognising their interdependence in the field of energy, the member countries of the IEF co-operate under the neutral framework of the Forum to foster greater mutual understanding and awareness of common energy interests in order to ensure global energy security. T
- he Forum’s biennial Ministerial Meetings are widely considered to be the world’s largest gathering of Energy Ministers.
- The magnitude and diversity of this engagement is a testament to the position of the IEF as a neutral facilitator and honest broker of solutions in the common interest.
- The IEF and the global energy dialogue are promoted by a permanent Secretariat of international staff based in the Diplomatic Quarter of Riyadh, Saudi Arabia.