India and China Decide to Pressure OPEC by Increasing Oil Imports from the U.S.

Bloomberg has reported that two major oil-importing countries in Asia, India and China, are negotiating to pressure OPEC members by increasing their oil imports from the United States. This report, dated Saturday, June 16, cites an unnamed Indian official stating that while OPEC members compete for a larger share of Asian oil markets, these two importing countries aim to reduce their dependence on oil from OPEC members to pressure them on controlling global oil prices. OPEC, along with several other producers led by Russia, committed at the beginning of last year to reduce their daily production by about 1.8 million barrels to lower excess oil supply and raise oil prices. Reports from global organizations, including the International Energy Agency, indicate that this year, global strategic oil reserves have fallen to their lowest levels in about five years. Oil prices have also surged to their highest levels since 2014 following the U.S. withdrawal from the JCPOA and the re-imposition of oil sanctions on Iran. However, now that the oil market has stabilized, internal disputes within OPEC regarding production increases have intensified. While Saudi Arabia emphasizes the need for increased production to meet global market demands and control oil prices, Venezuela, Iraq, and Iran are strongly opposed to increasing OPEC production. Next week, OPEC members are set to meet in Vienna, the organization's headquarters, to discuss the state of global oil markets. According to OPEC's annual report, the U.S. exported an average of 1.118 million barrels of crude oil per day last year, nearly double that of 2016. Abhishek Kumar, an analyst at Interfax Global Energy in London, told Bloomberg that increasing diversity in oil suppliers for India and China benefits both countries as it creates competition among oil producers. He stated that purchasing oil at the lowest possible price is vital for both countries. The Indian oil minister also expressed concern last month during a meeting with his Saudi counterpart that rising global oil prices negatively impact the economies of oil-importing countries. Bloomberg reports that China's largest refinery, CNPC, has reduced oil imports from OPEC members in recent months. The Indian official mentioned that currently, China and India have formed a coalition against OPEC, but other oil-importing countries like South Korea and Japan could also join this coalition. U.S. President Donald Trump has recently criticized OPEC for 'artificially controlling oil prices.' Although the U.S. exports oil, it also imports seven times that amount. Last year, the United States imported 7.912 million barrels of crude oil per day, which is 8% more than in 2016. The U.S. also exports about 5.2 million barrels per day of petroleum products.