India-China oil alliance may get disrupted by political differences: Chinese experts
Recently, reports have come out saying India wants to form an oil alliance with China to take on the dominance of the OPEC (Organisation of Petroleum Exporting Countries) and although China's Global Times has cited experts saying that such a deal would be beneficial for both crude importing giants, it also expressed reservations over the functionality of such a tie-up unless they resolved major political and economic problems.
On Wednesday, June 13, PTI cited an unidentified source to say that Indian Oil Corp (IOC) chairman Sanjiv Singh met his counterpart of China National Petroleum Corp (CNPC) Wang Yilin in Beijing earlier this month to give shape to the proposed plan.
It said the visit was a follow-up action on an earlier proposal made by Oil Minister Dharmendra Pradhan at the International Energy Forum held in April to form an "oil buyers' club" to have stronger bargaining position for the buyers vis-à-vis the sellers and also facilitate the purchase of more crude oil from the US to counter the OPEC's dominance, PTI added. The Global Times report said the specific result of the meeting were not known and the CNPC did not respond to its queries about the meeting.
Qian Feng, a researcher at Beijing's Chinese Association for South Asian Studies was cited by the Times as saying that the two Asian powers have a big room for energy cooperation since they are among the biggest importers of crude oil and such an alliance would give them a bigger say in setting price for global energy.
India and China accounted for 17 per cent of the world's oil consumption in 2017, the PTI report said.
However, as director of China Center for Energy Economics Research at Xiamen University, Xiamen, Lin Boqiang, said, the two neighbours' disagreement on various issues, including political and economic, could thwart such a possibility of cooperation.
It cited the Xinhua News Agency to say that India's relations with China although showed an improvement after Prime Minister Narendra Modi's informal meeting with Chinese President Xi Jinping in April end, the two countries still has disagreements, like over China's Belt and Road Initiative (BRI) which also features cooperation in energy.
Lin said the prospects of an alliance is undoubtedly beneficial for both the nations but that "we should not hold high expectations".
He also said that India had floated the idea of a platform of the oil buyers many years ago and the changes in the crude market made it relevant in current times.