India decouples with China in oil trade


Reference:CNN | Updated:31 Aug 2020

India's reported actions to decouple China in crude oil trade, which is another economic and trade conflict introduced by the South Asian country to occupy more mind space from China, and will have little effect due to the tiny size of trade, Chinese energy experts said on Friday.

Indian state refiners last week decided to stop sending crude import tenders to Chinese trading firms including CNOOC Ltd, Unipec and PetroChina, Reuters reported, citing sources.

The ban came after a long list of India's so-called economic crackdowns on China after a deadly border clash in June. India has curbed Chinese investment, disqualified Chinese companies bidding for Indian government procurement contracts and banned nearly 300 Chinese-developed mobile app services.  

However, Chinese energy trade experts said the India move is more of chest-beating, as China's share in global crude exports is tiny.

Lin Boqiang, director of the China Center for Energy Economics Research at Xiamen University, told the Global Times on Friday that the impact of such a ban would have no significant impact, noting China's share as a crude oil exporter in the global market is very small.

"Besides, crude oil is hard currency. If India is not wanting it, there are plenty of others wanting it," Lin said, adding that the Indian decision to not source crude from Chinese exporters will have no impact on the global crude price.

Jin Lei, an associate professor at China University of Petroleum, agreed.

"Much cry and little wool," Jin said, noting that China is not even among India's top 15 crude oil suppliers.

"But the action shows India further walks down the road heeding the example of the US to take radical measures against China," Jin told the Global Times on Friday. "It could be more of a political statement of its strong stance on China, but the Indian government apparently has picked a sector that will be least impacted."

The world's third biggest oil consumer and importer, India imports about 84 percent of its oil needs.

Lin said Chinese companies hold equity stakes in many oilfields but they are not the sellers.

Sinopec, which owns Unipec, declined to comment when contacted by the Global Times.

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