The old power structure of world markets could be on the verge of a great, potentially far-reaching shift, thanks to a deal between India and China to set up a buyers’ bloc, reported the Economic Times.
Reports have revealed that the two Asian powerhouses, the world’s second and third largest importers of oil, have neared a momentous deal to set up a buyers’ bloc that could dramatically tilt bargaining power in favour of importers. A high-level official from China’s National Energy Administration visited India last week to fast track the deal.
The upcoming buyers’ bloc will bargain collectively on oil supplies and over time, this joint sourcing mechanism could significantly erode OPEC’s sway on all things oil, reported the Mint.
The alliance between the two Asian countries is likely to bode well for other Asian oil importers too, as the buyers’ bloc could push OPEC to “reduce the premiums placed on oil sold to Asian countries,” said the Economic Times.