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.
Senior Fellow, IDSA, Ms Shebonti Ray Dadwal’s article on energy security, titled ‘India's quest for energy security: From buyer to market influencer’ was published in South Asia Monitor on March 5, 2017.
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
As was anticipated, the nuclear sanctions imposed against Iran were finally lifted on January 16, 2016 after it was certified by the International Atomic Energy Agency (IAEA) that Iran had met its obligations under the Joint Comprehensive Plan of Action (JCPOA) reached in July 2015 among six world powers.
The longer the price of oil remains depressed, India, like other major oil importers, will not only increase its dependence on crude imports, but it will also become more dependent on OPEC.
India needs to capitalise on the emerging Iranian gas supply market and the current low price scenario, before rival consumers snap up Iranian exports or prices go up. Developing broader relations that entail incorporating gas supplies from Iran would give India greater leverage at a time when other countries in South Asia are emerging as key gas importers.
Asia is challenged by a number of non-traditional security issues including the food–energy–water nexus, climate change, transnational crime, terrorism, disaster relief and economic performance. This volume categorizes and clarifies some key emerging issues in the area and looks at their interconnectedness and implications.
As global warming and melting of the ice is making the Arctic increasingly accessible, the region’s hydrocarbon riches are attracting international interest. Thus far, despite the presence of vast untapped energy and mineral resources, the Arctic is not considered a geopolitical hotspot. In fact, many of the Arctic states have dismissed the possibility of conflict over the region’s spoils due to the collaborative governance model that has been established.
The possible lifting of the sanctions on Iran will lead to a rush for a share of the lucrative Iranian energy pie similar to Myanmar’s opening up last year. India cannot afford to be left behind.
Trump’s Energy Plan – More Volatility for Oil Geopolitics
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.