New Delhi: Acting against the US backdrop on sanction on Iranian Oil imports, India and China are closely working on these common trade concerns which also includes buying oil and gas said sources with direct knowledge of the matter.
The two countries who happen to be the world’s second- and third-largest oil importers are reported to be working on finding a common ground where the two nations can collectively bargain for better prices from producers said a source on condition of anonymity.
The two nations have created a joint working group on oil and gas following a visit by Li Fanrong deputy chief of China’s National Energy Administration to New Delhi in March.
This arrangement between the two sides to cooperate will be the first institutionalized arrangement apart from other cooperation on issues such as counter-terrorism and the boundary dispute, HT reports.
“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,” a government official said while another added “both sides are closely discussing” cooperation in key areas such as oil purchases.
Iran remained the most important source of energy security for India and China as it is one of the largest suppliers of crude to the two major economies and with the US imposed sanctions on Iranian oil imports, the supply is disrupted causing huge economic loss to both countries.
Meanwhile, India in attempt to cover the huge demand-supply has turned to alternative suppliers such as Saudi Arabia, the UAE and Kuwait but supply from these sources is unlikely to be as cheap as Iranian oil as Tehran provided 60 days of credit and covered shipping and insurance costs.