In what could bolster the much acclaimed idea of 'Chindia', India and Asia - two of Asia's biggest buyers of crude oil - are contemplating of joining hands to counter the Organisation of the Petroleum Exporting Countries' (OPEC) dominance in the market and buy American supplies instead, a report in Bloomberg said.
As per the report, India and China are considering ways to improve the import of US crude to Asia, a move which is aimed at reducing their dependence on the OPEC, as per an official in New Delhi. Both New Delhi and Beijing want to put the OPEC producers to keep the prices under check, the Bloomberg report cited the official as saying on the condition of anonymity.
The report said a potential collaboration between the two major oil buyers would put the OPEC under more challenge as it is already facing competition for market share in Asia after new reserves of oil were found in Gulf of Mexico and Texas in southern US. The OPEC is also facing internal differences between members like Saudi Arabia and those like Iran, Iraq and Venezuela.
"Diversification of supply sources will benefit both India and China by increasing competition among oil producers," the Bloomberg report quoted Abhishek Kumar, analyst at Interfax Global Energy in London, as saying.
"The output reductions by OPEC and allies including Russia helped oil rebound from the worst crash in a generation, weighing on the economies of consuming nations. Prices last month were further boosted to the highest level since 2014 after a U.S. decision to reimpose sanctions on Iran threatened to curb exports from the Islamic Republic and as economic turmoil in Venezuela hurt the Latin American nation's output," the Bloomberg report said.