The United Nations, on Friday 30th August, held a committee session for the Organisation of Petroleum Exporting Countries (OPEC) which focused on the impact of political conditions due to reducing oil production. The delegates started the final session of the day by summarising the last session and the concept of foreign investors. All the ‘wealthier’ countries would help all the OPEC members in diversifying their economies. The delegates discussed how a shift from such a high commodity to a completely different mode of energy would definitely result in repercussions and how the long-term benefits outweigh the short-term effects. There would be a lot of economic recession due to oil being a major contributor to all the OPEC nations’ GDP.
Indonesia and Iran argued how after reducing the oil production there would be a higher unemployment rate, the respective shareholders would be affected, and there would be political social and economic instability. The MENA region is also prone to civil wars and proxy wars, and the higher unemployment rates could cause riots within the civilians for jobs and the government would be affected by this as the revenue would go down.
The delegate of Iraq talked about the short-term repercussions such as a global blowback which could cause problems as countries may need oil but prices may be too high and there could be a scarcity of the product as oil is a finite resource.
Indonesia said that wealthier countries will be focused on themselves so, developing countries will suffer and wealthy countries would be unable to provide aid or funds.
Indonesia mentioned how political conditions will be majorly destructed due to the reduction of oil production and will affect public sectors such as transportation. “The government might be at the brink of collapsing. This could lead to civil breakouts.” The delegate of Iraq how oil is considered ‘black gold’ and ‘the most precious material on Earth.’
The UAE said, “The western influence caused by multinational companies investing in different countries would be reduced as the OPEC nations would not be focusing so much on oil.” The unstable governments would be further influenced by foreign investments as well. The delegate of Iran asked, “How long will we let these western superpowers walk all over us and start proxy wars?”
Reporter: Vidhi Channa, Reuters
Editor: Gowri Kashyap