India, China join hands on oil

13 May 2019

India and China are working closely on common trade concerns, including cooperation in buying oil and gas, against the backdrop of a US squeeze through tariffs and sanctions on Iranian oil imports, officials said.

Iranian oil imports

Efforts have been made by the world’s second and third largest oil importers to find common ground and energy cooperation is one of the key areas where the two sides can collectively bargain for better prices from producers, the officials added.

Following a visit to New Delhi in March by Li Fanrong, deputy chief of China’s National Energy Administration, the two sides created a joint working group on oil and gas. This is the first institutionalized arrangement between the two sides to cooperate in energy though they have several groups on issues such as counter-terrorism and the boundary dispute.

“A meeting between petroleum and natural gas secretary MM Kutty and the vice minister of China’s National Energy Administration, Li Fanrong, was held on March 26 in New Delhi to discuss cooperation in the oil and gas sector,” one of the government officials said.

A person familiar with thinking in official quarters in Beijing said “both sides are closely discussing” cooperation in key areas such as oil purchases. He confirmed these issues had figured in the meeting between Kutty and Li in March.

Cooperation in energy has been on the agenda for some time; Kutty visited China last October, but the issue gained steam with the US announcing the end of exemptions to sanctions on Iranian oil imports last month.

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