Recently, the border conflict between China and India has escalated. Coupled with the false propaganda of the Indian media, India is currently being dazzled by anti-China sentiments. It frequently implements protectionist policies in the fields of trade, investment, and fantasizes about "decoupling" from China.
A few days ago, India is eyeing China-India oil trade again. Reuters quoted three sources on the 27th as saying that Indian state-owned oil refineries have stopped buying crude oil from companies related to China.
One of the sources said that last week, Indian state-owned oil refineries decided to stop sending crude oil import bidding documents to Chinese oil trading companies such as CNOOC, United Petrochemical and PetroChina. In addition, Indian state-owned refinery companies have also decided not to conduct fuel import transactions with companies such as China Aviation Oil (Singapore), PetroChina and United Petrochemical subsidiaries, and have stopped renting Chinese tankers for imports.
But another source pointed out that if the Indian state-owned oil refinery’s bid-winning plan is implemented in accordance with the “cost, insurance and freight” (CIF, an international trade term) standard, the seller will be responsible for arranging the ship to transport crude oil, which means that Chinese tankers may Will still be used.
As the world’s third largest oil consumer and importer, India relies on imports for nearly 84% of its oil demand; while in its 5 million barrels/day of oil refining capacity, Indian state-owned refineries control 60% of the share. The market buys crude oil.
China does not actually export crude oil directly to India. However, the Chinese companies mentioned above are major oil traders in the world. They hold equity in many oil fields in the Middle East, Africa and America, and they often bid for crude oil import projects from Indian state-owned refiners.
In July, oil from the Middle East accounted for 71.5% of India's crude oil imports, of which India imported the most crude oil from Iraq, followed by Saudi Arabia and the UAE. The United States is the fourth largest supplier of imported crude oil to India, followed by Kuwait, Colombia and Qatar.
On the other hand, after the outbreak of the new crown pneumonia epidemic, India's demand for fuel has dropped significantly, which has made India's oil refineries overcapacity, and most of the oil refineries have maintained operations at low production levels. India’s July oil imports fell to the lowest level in more than nine years, dropping to about 3 million barrels a day.
Therefore, regardless of the current demand situation of India or the composition of its crude oil imports, the restrictions on Chinese oil imports have little actual impact on Chinese oil companies and Indian oil refineries themselves.
This measure is more like the "show-making" behavior announced by the Indian authorities to cater to and incite anti-Chinese sentiments in the country.
However, some market participants in India believe that the country is currently in a special period in which the epidemic affects demand, but if demand resumes, these new regulations will have a huge impact. India needs to consider the overall situation and national interests.
As our Foreign Ministry spokesperson Zhao Lijian emphasized on June 30, the Indian government has the responsibility to safeguard the legitimate rights and interests of international investors, including Chinese companies, in accordance with market principles. The cooperation between China and India in pragmatic areas is mutually beneficial and win-win. This kind of cooperation pattern has been artificially damaged, and in fact it is not in the interests of India.
