Relations between India and China are not at their best point as the two countries are fighting for leadership in Asia. Beijing and Delhi cannot solve the territorial disputes that once led to the war, but all this does not mean that they would not cooperate in case of economic necessity. One of these areas of cooperation is formal establishment of an organization of oil importers. Recall that China is the world's top buyer of oil, and India occupies the fourth place in the list of importers. China and India account for 17% of the world's consumption of oil.
Be that as it may, but now is the time to begin to worry, because the cartels of producers and buyers of oil cannot help but will be competitors by their definition. As the largest oil importers, the PRC and India are more likely to suffer from OPEC actions than others.
"The timing is right," writes the Times of India, referring to a senior Indian official who said that formal negotiations to establish a cartel of oil importers began in June. "The boom in the US oil industry and the increase in gas production give us a good weapon against OPEC."
The danger of the Sino-Indian initiative for OPEC is also great. According to Bloomberg, Japan and the European Union, previously refusing to participate in any actions against the oil cartel, can now join the two Asian countries. The reason for such a courage is simple: unlike all previous cycles of oil price fluctuations, there is now an alternative to fossil fuels.
Electrification of the automobile industry, believes Oil Price (OR), is one of the areas in which the interests of oil producers and buyers may clash. India, China and the European Union are actively developing creation of electric vehicles. Japan leads the way in the production of batteries for electric vehicles. They may well blow up the oil market and send the oil cartel into a knockout. However, it should be noted that it is not so easy to implement.
Here, for example, India. According to recent polls, 90% of Indian drivers would like to drive an electric car if the government creates an extensive fueling system, reduces road taxes and increases subsidies. Another poll reveals that the prices of electric vehicles and their mileage are an obstacle to their mass production in India. Given these hindrances, Delhi has recently changed its objectives somewhat: instead of making a 100% transition to electric vehicles, it was decided that almost every third car (30%) on Indian roads should be electric by 2030.
China is the unconditional world leader in the transition to electric cars. Last year, the country accounted for more than 50% of all electric vehicles sold on the planet. The government in every way encourages automakers to produce electric vehicles. However, by 2020, these subsidies will decrease to 0. Automakers are already getting ready to produce electric vehicles without the state support. It is not yet clear if the boom in electric vehicles will continue in this connection in China after 2020.
Beijing and Delhi consider the situation with EV quite a sufficient reason to strengthen its influence on the oil market, which is now dominated by OPEC, and create a club of oil buyers for this purpose.
Europe is also actively moving to electric vehicles. In addition, the Old World is very sensitive to the protection of the environment. At the same time, the EU countries import a lot of oil and so they also have a reason to worry about the prices.
Europe will benefit from the transition to electric cars the most since this type of cars is increasingly becoming popular here. By the way, China, India, the EU and Japan account for 65% of the global production of electric vehicles. This quartet also accounts for 35% of world oil consumption. It's no secret that they would like to buy less oil.
United, they can agree on a more rapid or gradual transition to electric vehicles. Everything will depend on the OPEC position: whether the cartel will agree to lower oil prices or not.
Skeptics believe that the main barriers to electric vehicles are subsidies and infrastructure. Even India, China, EU and Japan united will take some time to overcome them. In any case, in the long run oil producers will have to reckon with oil buyers if they create a new cartel.
source: bloomberg.com
Be that as it may, but now is the time to begin to worry, because the cartels of producers and buyers of oil cannot help but will be competitors by their definition. As the largest oil importers, the PRC and India are more likely to suffer from OPEC actions than others.
"The timing is right," writes the Times of India, referring to a senior Indian official who said that formal negotiations to establish a cartel of oil importers began in June. "The boom in the US oil industry and the increase in gas production give us a good weapon against OPEC."
The danger of the Sino-Indian initiative for OPEC is also great. According to Bloomberg, Japan and the European Union, previously refusing to participate in any actions against the oil cartel, can now join the two Asian countries. The reason for such a courage is simple: unlike all previous cycles of oil price fluctuations, there is now an alternative to fossil fuels.
Electrification of the automobile industry, believes Oil Price (OR), is one of the areas in which the interests of oil producers and buyers may clash. India, China and the European Union are actively developing creation of electric vehicles. Japan leads the way in the production of batteries for electric vehicles. They may well blow up the oil market and send the oil cartel into a knockout. However, it should be noted that it is not so easy to implement.
Here, for example, India. According to recent polls, 90% of Indian drivers would like to drive an electric car if the government creates an extensive fueling system, reduces road taxes and increases subsidies. Another poll reveals that the prices of electric vehicles and their mileage are an obstacle to their mass production in India. Given these hindrances, Delhi has recently changed its objectives somewhat: instead of making a 100% transition to electric vehicles, it was decided that almost every third car (30%) on Indian roads should be electric by 2030.
China is the unconditional world leader in the transition to electric cars. Last year, the country accounted for more than 50% of all electric vehicles sold on the planet. The government in every way encourages automakers to produce electric vehicles. However, by 2020, these subsidies will decrease to 0. Automakers are already getting ready to produce electric vehicles without the state support. It is not yet clear if the boom in electric vehicles will continue in this connection in China after 2020.
Beijing and Delhi consider the situation with EV quite a sufficient reason to strengthen its influence on the oil market, which is now dominated by OPEC, and create a club of oil buyers for this purpose.
Europe is also actively moving to electric vehicles. In addition, the Old World is very sensitive to the protection of the environment. At the same time, the EU countries import a lot of oil and so they also have a reason to worry about the prices.
Europe will benefit from the transition to electric cars the most since this type of cars is increasingly becoming popular here. By the way, China, India, the EU and Japan account for 65% of the global production of electric vehicles. This quartet also accounts for 35% of world oil consumption. It's no secret that they would like to buy less oil.
United, they can agree on a more rapid or gradual transition to electric vehicles. Everything will depend on the OPEC position: whether the cartel will agree to lower oil prices or not.
Skeptics believe that the main barriers to electric vehicles are subsidies and infrastructure. Even India, China, EU and Japan united will take some time to overcome them. In any case, in the long run oil producers will have to reckon with oil buyers if they create a new cartel.
source: bloomberg.com