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4) Oil prices are not only subject to the economics of demand and supply but also to the subjective wishes of the leaders of oil producing countries. Critically analyze in the light of India’s energy security.(250 words)

Topic– Effect of policies and politics of developed and developing countries on India’s interests,

4) Oil prices are not only subject to the economics of demand and supply but also to the subjective wishes of the leaders of oil producing countries. Critically analyze in the light of India’s energy security.(250 words)

Indian express

Why this question

In spate of the recent international events, which have the ability to lead to a increase in oil prices, it is important to discuss the factors which affect oil prices and its relevance for India.

Directive word

Critically analyze-  here we have to examine methodically the structure or nature of the topic by separating it into component parts, and present them as a whole in a summary. based on our discussion we have to form a concluding opinion on the issue.

Key demand of the question.

The question wants us to dig deep into the issue and bring out the effect of subjective wishes of oil producing countries along with the effect of demand and supply on oil prices. It wants us to discuss the issue in the context of India’s energy security needs and how India should respond in such situations.

Structure of the answer

Introduction– write a few introductory lines about the  India’s energy needs and its dependence on oil imports.

Body-

  1. Discuss the effect of demand and supply on oil prices. E.g discuss how a decline in supply from the oil producing countries leads to spike in oil prices or how a decreased global demand for oil results in reduction of oil prices.
  2. Discuss how subjective wishes of leaders of oil producing nations affects oil prices. E.g discuss the diplomatic tensions between countries like US and Iran, which are constructed out of subjective assessments of the leaders leads to spike or reduction in oil prices. Similarly give the example of US Iraq war and the recent Saudi Arabia and Egypt tussle etc.

Conclusion– based on your discussion, form a fair and a balanced conclusion on the given issue. E.g mention that India needs to invest in renewable sources, diversify oil sources and enter into long term supply contracts with oil producing countries etc.