THE HINDU Editorial Vocabulary - June 25, 2018 - Topic 1
When it comes to crude oil prices, politics
dwarfs everything else. The Organization of the Petroleum Exporting Countries
(OPEC) on Friday agreed to increase its daily output to address the problem of
rising crude oil prices. Saudi Arabia’s Energy Minister Khalid al Falih
announced that the cartel’s output would be increased by about a million
barrels a day beginning in July. The official statement released by the group,
however, failed to mention any solid numbers regarding the planned increase in
production.
It simply stated that OPEC countries would “strive” to adjust
production levels in order to conform to the terms of the production cut deal
reached in 2016. Unsurprisingly, in the absence of any clear intent on the part
of OPEC to guide prices lower, the price of the benchmark WTI crude increased
by as much as 5% after Friday’s announcement of a production increase. OPEC
members had in late 2016, it is worth noting, agreed to a historic deal to cut
output by 1.2 million barrels a day in order to end a supply glut and raise the
price of oil. Since then, the cartel has in fact managed to overshoot its
production cut target following unexpected outages in countries such as
Venezuela and Libya, contributing to the steep rise in oil prices. In May, for
instance, OPEC overshot its production cut target by 624,000 barrels a day. The
lack of any clear commitment from OPEC to raise production suggests that the
threat of a supply shock still looms over the global economy. But, for now, the
deal allows stakeholders in the energy market to save face.
The pressure on Saudi Arabia, the de
facto leader of OPEC, to be seen as doing something to tackle rising oil
prices was clear, going into the meeting on Friday. U.S. President Donald Trump
has been vocal in recent months about the need to bring down rising oil prices
that threaten to put the global economy under stress. Other oil-importing
economies, especially emerging markets such as India that have been affected by
the rising cost of oil imports, have also been exerting pressure. The present
deal could help the Saudis appease major oil consumers to some extent.
Meanwhile, Iran, which has been opposed to raising OPEC output as it would
lower prices, is set to suffer a marginal loss as it lacks spare capacity to
ramp up production. This works in favour of its rival, Saudi Arabia, which can
recover from the impact of lower prices by capturing market share. The deal,
however, still allows Iran to save face by projecting the proposed output
increase simply as a return to the original OPEC agreement framed in 2016.
Whether all this politicking will bring a stable reduction in global oil prices
remains to be seen.
Vocabulary
Dwarf: cause
to seem small or insignificant in comparison.
Example: The
buildings surround and dwarf All Saints Church
Synonyms: dominate, tower
over, loom over, overshadow, overtop
Mention: a
reference to someone or something.
Example: Their
eyes light up at a mention of Sartre
Synonyms: reference
to, allusion to, remark of/about/regarding, statement
about/regarding
Strive: make
great efforts to achieve or obtain something.
Example: National
movements were striving for independence
Glut: an
excessively abundant supply of something.
Example: There
is a glut of cars on the market
Synonyms: surplus, excess, surfeit, superfluity, overabundance, superabundance
Outage: a
period when a power supply or other service is not available or when equipment
is closed down.
Example: Providing
phone service during a power outage is another technical problem.
Synonyms: power
failure, brownout, blackout
Instance: an
example or single occurrence of something.
Example: A
serious instance of corruption
Synonyms: example, exemplar, occasion, occurrence, case, illustration
Affect: pretend
to have or feel something
Example: As
usual I affected a supreme unconcern
Synonyms: pretend, feign, fake, simulate, make
a show of, make a pretense of
Appease: pacify
or placate someone by acceding to their demands.
Example: Amendments
have been added to appease local pressure groups
Synonyms: conciliate, placate, pacify, mollify, propitiate, reconcile, win
over
Extent: the
area covered by something.
Example: An
enclosure ten acres in extent
Synonyms: area, size, expanse, length, proportions, dimensions
Reduction: the
action or fact of making a specified thing smaller or less in amount, degree,
or size.
Example: Talks
on arms reduction
Synonyms: cutback, cut, downsizing, scaling
down, trimming, pruning, axing
