Thursday, May 2, 2019

Sanjeev Choudhary — India, China set up joint working group to tackle crude volatility

The two countries have set up a joint working group that would identify subjects of cooperation in the energy sector, including ways to rein in global oil prices. The group, set up a month ago, will be co-chaired by a joint secretary in the oil ministry and his Chinese counterpart.

China and India, second- and third-largest oil consumers, respectively, have been meaning to form a joint front for more than a decade to assert their weight in the oil market, dominated by a producers’ cartel, OPEC....
Monopsony power confronts monopoly power to squeeze out rent extraction.

China and India are also under no illusions about the US plan is dominate energy in order to gain another lever of power in addition to the global reserve currency to control the world economically as well as financially — in the favor of US interests, of course, despite all the noise about "rule-based order," "freedom and democracy," "human rights," and "Western values." The US has exhausted the creditability of that, actions speaking louder than words.

This is not only economic but also strategic.

The Economic Times (India)
India, China set up joint working group to tackle crude volatility
Sanjeev Choudhary, ET Bureau

1 comment:

Ralph Musgrave said...

I don't see China and India squeezing out much rent extraction. Rent is the part of the price charged for something which is additional to the minimum the supplier needs to stay in business. That "additional" bit is very large for those owning oil deposits where extraction is cheap, e.g. Saudi.

So China and India acting in unison would give those two countries A BIT more clout, but my guess is that Saudi would be left with a nice big pile of rent.