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Letter to BS: Take advantage of slump in oil prices, shore up economy

The present stand-off between Russia and the OPEC is a kind of payback because it is going to seriously hit America's own shale gas programme

Business Standard 

oil, prices, crude
Representative Image

Your editorial “The oil crash” (March 10) rightly cautions the government that “the gai­ns from the sharp drop in crude prices will be temporary”. We have all seen the fi­ckle nature of crude prices. No one, barring the youngsters, has forgotten the time before the formation of the Or­ga­ni­sation of the Pe­t­roleum Ex­porting Co­un­tri­es (Opec) when the crude price used to be in single digits per barrel. Then ca­me the OPEC, and Saudi Ara­bia and other oil producers we­re tra­nsformed from poor desert folks to ow­ners of un­foreseen riches. Of course, American oil compa­nies ma­de huge gains too from their concessions in West Asia.

The present stand-off be­t­ween Russia and the Opec is a kind of payback because it is going to seriously hit America’s own shale gas programme. Anyway, our government should be grateful for the windfall “gift” and shore up our economic situation. And, of co­u­r­se, remain ready for a patch-up between the warring Russia and Saudi Arabia — perhaps ironically with the US mediation — and the crude barrel prices zooming up again.

Krishan Kalra, Gurugram

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First Published: Wed, March 11 2020. 22:28 IST