The United States may have just started another war that it cannot win. This time it is in the oil market, the foe is the powerful OPEC+ cartel and the prize is lower oil prices.
President Joe Biden has roped in a new, motley set of allies in China, India, Japan, South Korea and the UK, which, together account for a little less than half the total oil consumption in the world.
In an unprecedented move, the group has initiated steps to release crude oil from their respective strategic reserves that together add up to about 70 million barrels.
The move appears aimed as much at cooling rising prices as sending a signal to the OPEC+ that the patience of its consumers is wearing thin.
Though the angst is justified, neither of the two objectives may be achieved simply because the balance of power — control over oil reserves — rests with the OPEC+.
Though prices may be nudged downwards in the short term — and that has not happened in the 24 hours since the move was announced — in the long term they are bound to bounce back simply because the firepower that the group commands is limited in its ability to influence supply dynamics.
Yes, the United States has over 600 million barrels in its strategic reserve and China has another 238 million barrels (as of 2017, the last available official data) while India has 38 million barrels, all of which add up to a substantial number.
But these are meant to be drawn down only when supplies are blocked either due to war or a natural calamity. There is a limit to which they can be used to influence prices.
The OPEC alone, in comparison, lords it over more than 1,100 billion barrels, which is 80 per cent of global oil reserves.
The equation is clear. Ironically, oil prices moved up after the announcement by the US and India on Tuesday, partly because the move was already priced in by the markets and partly because the market anticipates the OPEC+ to retaliate.
Chances are that the cartel may decide not to go ahead with a planned increase of 4,00,000 barrels a day in order to nullify the impact of the release from strategic reserves. Such a move would drive home the message to the US-led group that the weapon they are brandishing is blunt and limited in power.
President Biden’s move has to be seen in the backdrop of the friction between the US and Saudi Arabia in recent times with the former refusing to play ball with the Mohammed Bin Salmanled Saudi Arabia in the backdrop of the killing of journalist Jamal Khashoggi.
Where does all this leave India?
Given the limited size of its reserves which add up to just about a week’s consumption, India may have erred in joining the US initiative. There is unlikely to be any gain in terms of lower prices; if anything, there will be a cost to this move as the country will have to top up its reserves again at the current high prices.
The focus of the government ought to be on building additional storage to increase the reserves to at least a fortnight’s consumption, rather than squander parts of it in symbolic exercises that fail to advance its national interests.
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India’s Strategic Oil Reserves:-
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[wptelegram-join-channel link=”https://t.me/s/upsctree” text=”Join @upsctree on Telegram”]2021 WEF Global Gender Gap report, which confirmed its 2016 finding of a decline in worldwide progress towards gender parity.
Over 2.8 billion women are legally restricted from having the same choice of jobs as men. As many as 104 countries still have laws preventing women from working in specific jobs, 59 countries have no laws on sexual harassment in the workplace, and it is astonishing that a handful of countries still allow husbands to legally stop their wives from working.
Globally, women’s participation in the labour force is estimated at 63% (as against 94% of men who participate), but India’s is at a dismal 25% or so currently. Most women are in informal and vulnerable employment—domestic help, agriculture, etc—and are always paid less than men.
Recent reports from Assam suggest that women workers in plantations are paid much less than men and never promoted to supervisory roles. The gender wage gap is about 24% globally, and women have lost far more jobs than men during lockdowns.
The problem of gender disparity is compounded by hurdles put up by governments, society and businesses: unequal access to social security schemes, banking services, education, digital services and so on, even as a glass ceiling has kept leadership roles out of women’s reach.
Yes, many governments and businesses had been working on parity before the pandemic struck. But the global gender gap, defined by differences reflected in the social, political, intellectual, cultural and economic attainments or attitudes of men and women, will not narrow in the near future without all major stakeholders working together on a clear agenda—that of economic growth by inclusion.
The WEF report estimates 135 years to close the gap at our current rate of progress based on four pillars: educational attainment, health, economic participation and political empowerment.
India has slipped from rank 112 to 140 in a single year, confirming how hard women were hit by the pandemic. Pakistan and Afghanistan are the only two Asian countries that fared worse.
Here are a few things we must do:
One, frame policies for equal-opportunity employment. Use technology and artificial intelligence to eliminate biases of gender, caste, etc, and select candidates at all levels on merit. Numerous surveys indicate that women in general have a better chance of landing jobs if their gender is not known to recruiters.
Two, foster a culture of gender sensitivity. Take a review of current policies and move from gender-neutral to gender-sensitive. Encourage and insist on diversity and inclusion at all levels, and promote more women internally to leadership roles. Demolish silos to let women grab potential opportunities in hitherto male-dominant roles. Work-from-home has taught us how efficiently women can manage flex-timings and productivity.
Three, deploy corporate social responsibility (CSR) funds for the education and skilling of women and girls at the bottom of the pyramid. CSR allocations to toilet building, the PM-Cares fund and firms’ own trusts could be re-channelled for this.
Four, get more women into research and development (R&D) roles. A study of over 4,000 companies found that more women in R&D jobs resulted in radical innovation. It appears women score far higher than men in championing change. If you seek growth from affordable products and services for low-income groups, women often have the best ideas.
Five, break barriers to allow progress. Cultural and structural issues must be fixed. Unconscious biases and discrimination are rampant even in highly-esteemed organizations. Establish fair and transparent human resource policies.
Six, get involved in local communities to engage them. As Michael Porter said, it is not possible for businesses to sustain long-term shareholder value without ensuring the welfare of the communities they exist in. It is in the best interest of enterprises to engage with local communities to understand and work towards lowering cultural and other barriers in society. It will also help connect with potential customers, employees and special interest groups driving the gender-equity agenda and achieve better diversity.