View: India can become a rule-maker in the global oil trade instead of the rule-taker it is today
Even though the centre of gravity of global oil trade has shifted from the West to Asia, the oil trade is still managed on western exchanges.
That means prices are set using western benchmarks — Brent and West Texas Intermediate — & the medium for exchange remains the dollar. This anomaly puts Asian countries at a disadvantage that will only grow worse with time as trade becomes increasingly skewed toward Asia.
But a solution is within reach. India needs to push for a bigger role for its exchanges and currency in the oil trade. This will help improve its energy security and create a bigger international role for the rupee.
