What is the impact of the oil price drop on Global Warming?

Recently it was announced that the global crude oil prices have dropped. The man behind this is touted to be the Crown Prince of Saudi Arabia, Mohammad Bin Salmaan, aka MBS. This is the biggest price drop since 1991. This intrigued me and I began reading on what this is all about.

Here’s what I gathered,

Saudi Arabia and Russia are the world's top crude oil exporters. They signed a deal in 2016 to curb the supply at 2.1 million barrels per day, in an attempt to manipulate the demand and supply and level the crude oil prices. Now, Saudi Arabia wants to increase that number to 3.6 million barrels through 2020, Russia doesn’t want that.

So to prove their upper hand over the oil market or just to have a bigger market share, Saudi slashed the oil prices over the last weekend. Talks of increasing the production to about 10 miller barrels a day is also doing rounds.

This is where I got interested, if we are going to drill so much to extract oil, aren’t we in a way harming nature? Will this affect our current carbon footprint? How does it affect the ecological balance of the planet?

A New York Times article says, Lower oil prices have a mixed impact on the environment. Drilling goes down, as do releases of methane, a powerful greenhouse gas connected with climate change. But if prices stay low for a while, gas-guzzling cars and trucks may find more buyers.

Other than that, there are numerous other effects of  oil drilling from affecting the local wildlife and marine life to increasing the carbon footprint of the countries who buy the oil. Let’s also not forget the fact that the marine life also makes up a part of our food chain, in effect harming human life as well. 

So it does make one wonder right, where is all this headed?

What does this mean for Indian Economy?

1. While I am not an expert on this, I did come across a few interesting details during my research which I thought of sharing.
2. India imports nearly 82 per cent of its oil
3. In 2018-19, India spent $87 billion on oil imports
4. If the oil prices remain low, India could see an overall import bill come down
5. Analysts believe, for each drop of a dollar in crude prices, India’s import bill comes down by almost Rs 3000 crore

Source:

1. https://edition.cnn.com/2020/03/09/business/oil-price-crash-explainer/index.html
2. https://theprint.in/economy/why-oil-prices-are-going-down-and-how-it-affects-the-indian-economy/378202/
3. https://www.nytimes.com/2020/03/09/business/energy-environment/saudi-oil-price-impact.html