India and China have discussed creating an ‘oil buyers’ club’ to be able to negotiate better prices with oil exporting countries.
They will be looking to import more US crude oil in order to reduce OPEC’s sway, both over the global oil market and over prices, India’s Petroleum Ministry said on Wednesday.
“With oil producers’ cartel OPEC playing havoc with prices, India discussed with China the possibility of forming an ‘oil buyers club’ that can negotiate better terms with sellers as well as getting more US crude oil to cut dominance of the oil block,” a tweet from the Petroleum Ministry’s Twitter account reads.
India has been saying for months that oil prices have risen too much to be sustainable for many oil-importing countries.
Last month, as Brent Crude prices briefly broke above $80 a barrel—the highest since late 2014—gasoline and diesel prices in India surged to a five-year-high, also due to a weakening rupee against the US dollar.
India is concerned that the rallying oil prices are hurting its economy, and its Petroleum Minister Dharmendra Pradhan reiterated the need for “stable and moderate” prices in a phone conversation with Saudi Arabia’s Energy Minister Khalid al-Falih in the middle of May.
On Thursday, Pradhan met with ambassadors of OPEC countries to India and “discussed India’s growing position in the world energy demand & the need for responsible pricing which balances the interests of both the producer & consumer countries,” the Indian minister tweeted today, adding that he had also suggested creating transparent and flexible markets for both oil and gas.
“Further also raised the issue of discriminatory pricing in global oil & gas trade through measures such as Asian Premium. Urged the OPEC Ambassadors to reconsider these discriminatory measures in the overall interest of all the countries & work together for a sustainable future,” Pradhan added.
The Indian oil minister plans to visit Vienna next week to take part in the 7th OPEC International Seminar to further discuss the oil market and pricing issues with OPEC’s Secretary General Mohammad Barkindo and with ministers from OPEC countries, the Indian government said in a statement today.