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Oil-poor India needs to supersize its Rosneft order: Gadfly

Vladimir Putin is said to be looking to sell almost a fifth of Russian state oil champion Rosneft and wants China and India to team up to buy it. Narendra Modi should negotiate for a bigger share. The attractions for Putin of splitting a stake between the world's No. 2 and No. 3 oil importers are obvious. Russia has been fighting Saudi Arabia for market share in China for years, and often bests the world's biggest producer in terms of import volumes into the People's Republic. With the globe awash in oil and an initial public offering of Saudi Aramco in the works, equity in oil companies might be a more valuable resource in cementing trade relationships than the black gold itself.

Still, China's oil consumption appears to be slowing, with apparent demand plateauing and even declining since August last year. While Chinese companies have been lavish with their overseas investments of late, there's no particular need to buy a chunk of Rosneft to secure a new source of energy supply. Indeed, of China's big three oil exploration and production companies, refinery-heavy Sinopec is cutting production and PetroChina is growing it in the low single-digits. Only Cnooc is making a serious attempt to raise output. India is a different beast, with a shortage of crude that's only going to get more acute as incomes rise and automobile ownership grows.