The step to jointly bargain for crude oil is taken to get better prices as oil producers charge an Asian premium from India, China and others for supplying petroleum.
Two of the largest consumers of petroleum products in the world — India and China — will explore the possibility of sourcing crude oil jointly from the international markets, India’s petroleum minister Dharmendra Pradhan said on Thursday during the conclusion of the 16th International Energy Forum. The 17th edition of the ministerial-level meet will be organised in China in 2020 and will be co-hosted by Morocco. The step to jointly bargain for crude oil is taken to get better prices as oil producers charge an Asian premium from India, China and others for supplying petroleum. On Wednesday, India’s Prime Minister Narendra Modi, while addressing delegates attending the meet from various countries, had urged for ‘responsible pricing’ of crude oil and natural gas. Pradhan said Indian Oil (IOC) and China National Petroleum Corporation (CNPC) have been asked to take the lead for both the countries and explore ways through which joint bargaining can be done. To start with, while the two nations may source crude oil from West Asia initially, they may likely be joined by Japan and South Korea later to bolster their bargaining power. India, China, Japan and South Korea are the top four consumers of petroleum products in the world apart from the US, which is the second-largest consumer.
“CNPC is also concerned about the issue of Asian premium. We are looking for more co-operation on crude procurement, scouting for oil fields, bring in best enhanced oil recovery activities and technology sharing,” Pradhan said, adding that the co-operation will be multi-dimensional. Li Fanrong, deputy administrator, National Energy Administration of China, echoed the same view. The idea to look for crude oil jointly by these Asian countries has been discussed in the past as well, though no steps were taken. Sanjiv Singh, chairman of IOC and the lead appointed by India to steer dialogue with China, said the idea has been conveyed and the two sides will look for ways to execute the plan.