ASSIGNMENT - I

Crude Oil - Crude oil and petroleum products are traded on a global scale. Countries trading
links are not evenly spread. Some countries are intimately linked, while others are just
loosely linked, resulting in a global pattern of international trade. The United States, Russia,
Saudi Arabia, China, and Japan are the primary countries in the crude oil network. Because
countries in the same region tend to be in the same community, the geographical component
is becoming more apparent. In 2020, global oil demand is predicted to drop by a record 9.3
million barrels per day. Containment restrictions have had the effect of bringing mobility to a
halt in 187 countries and territories. The International Energy Agency (IEA) has asked key
consumers and producers to work together through the G20 forum to mitigate the impact on
market stability, and an unusual meeting of energy ministers from the G20 and other
countries took place on Friday, April 10th.The actions agreed by OPEC+ and the G20
countries would not immediately rebalance the market. However, by decreasing the peak of
the supply overhang and flattening the curve of stock accumulation, they aid a complex
system in absorbing the worst of this crisis, whose short-term implications for the oil market
remain unknown. We expect a big decline in demand of up to 29 mb/d in April, followed by
another significant drop of 26 mb/d in May. Although demand will still be 15 mb/d lower than
a year ago, the slow rebound is expected to gather traction in June. There is no viable
agreement that would reduce supply enough to compensate for such short-term demand
losses. However, the accomplishments of the previous week are a good start, and they have
the potential to start reversing the stock market's upward trend as we enter the second half
of the year.

Afghanistan - From a political, social, and economic standpoint, the Taliban ascendancy is
having a domino effect on Afghanistan. The Taliban's takeover is causing enormous
disruptions in trade, supply chains, transportation, and import and export, making it difficult
for local businesses to continue operating. Air routes (the main mode of export) have been
restricted to military planes only, and bordering nations have locked their borders in
anticipation of a mass exodus. Local businesses and international organisations doing
business in and with Afghanistan will have to adjust to a new political environment in which
rules and regulations will drastically change; skilled labour will be difficult to come by; current
foreign business relationships (with clients and/or suppliers) will almost certainly end; and
providing security for their employees and customers will be difficult. Given the country's
reliance on foreign aid and international assistance, political unrest risks deterring foreign
investment. The loss of income could be devastating for the country, and with real ambiguity
about how the Taliban intend to administer the country and when they will be free to trade
again, many worry a humanitarian disaster is on the horizon. Fresh connections with
countries such as China and Russia, on the other hand, would bring new investments to the
Afghan economy. Afghanistan's natural riches could be appealing to international investors,
but only if corruption and security concerns are addressed.

Covid'19 - Most significant change in the global environment during 2020-21, which has a
significant impact on the world, was covid19. It has an impact not only on the market but also
on people. It has wreaked havoc on international trade and the global supply chain for both
essential and non-essential goods. The pandemic has a significant impact on the trade
 dependency of developing countries. Some countries are heavily reliant on other countries,
whether for agriculture or for non-agricultural products. Countries suffered significant losses
as a result of the pandemic shutdown, when all modes of transportation were prohibited and
no trading was possible. At the time, the balance of trade (net export) of a country was
drastically reduced. Because of security concerns, international trade was prohibited. Only
medical goods, such as face masks and PPE kits, were allowed to be imported and exported
at the time.But it was at this point that developing countries like India rediscovered the value
of self-sufficiency and launched a campaign called "Vocal for Local." It was a significant
development in India's international trade because domestic producers now have the
opportunity to expand. It will reduce India's imports while increasing its exports. This was the
most significant development in India following Covid19. Many countries, on the other hand,
have implemented inward-looking measures such as export bans and import restrictions to
protect their domestic markets. Border closures prevent essential commodities from
reaching vulnerable areas, depriving people of much-needed health care and food supplies.

China's aggressive behaviour - In Ladakh, India and China have accused each other of
invading the other's territory. Since a war in 1962, most of the estimated 3,440-kilometer
border has been undefined, with both countries' perceptions of their frontier differing.
According to Indian media, the conflict erupted after Chinese forces erected tents, dug
trenches, and moved heavy equipment several kilometres into what India considered its
territory. The Indian army, caught off guard by the sudden Chinese move, responded by
sending tens of thousands more troops and armaments to Ladakh. Because Chinese
products are cheaper than domestic products, the Indian market relied heavily on them for
everything from electronics to hairpins. Trade between India and China suffered a significant
decline as a result of the war. It has an impact on trade between the United States and
China because the United States and India have excellent political and business ties.
Because of China's aggressive behaviour, the United States has imposed a boycott on the
country, which has had a significant impact on the Chinese economy. China's exports to
India have decreased by 13% since the 2020 war. Despite the trade war with the United
States and the pandemic, two-way trade increased by 8.3% to $586 billion, with Chinese
exports increasing by 7.9% to a new high of $451 billion. The trade surplus with the United
States was $317 billion in 2020, up from $288 billion at the end of President Donald Trump's
first year in office in 2017, underscoring the tariff and trade war's limited impact as he nears
the end of his presidency.

REFERENCES

i. https://www.worldbank.org/en/news/press-release/2020/10/22/impact-of-
covid-19-on-commodity-markets-heaviest-on-energy-prices-lower-oil-
demand-likely-to-persist-beyond-2021

ii. https://www.sciencedirect.com/science/article/pii/S0889158321000149
iii. https://economictimes.indiatimes.com/news/economy/foreign-
trade/afghanistan-situation-to-impact-trade-with-india-
exporters/articleshow/85366698.cms?from=mdr

iv. https://unctad.org/system/files/official-document/ditcinf2020d1.pdf