world's third-largest oil importer, has sealed a first deal to import crude oil
from the US and the cargo is to be delivered in October.
comes within weeks of Prime Minister Narendra Modiís visit to the US when US
President Trump spoke of his country looking to export more energy products to
have bought 2 million barrels of crude oil from North America comprising 1.6
million barrels of US Mars crude and 400,000 barrels of Western Canadian
Select," IOC Director (Finance) A K Sharma said adding that the company
will buy more crude from the US if the market conditions remain favourable for
US Mars is
a heavy, high-sulphur grade which will be processed at IOC's newest refinery at
Paradip in Odisha.
the current international oil markets where the differential between Brent (the
benchmark crude or marker crude that serves as a reference price for buyers in
western world) and Dubai (which serves as a benchmark for countries in the
east) has narrowed.
after including the shipping cost, buying US crude proved to be very cost
competitive to us and so we bought one very large crude carrier (VLCC) cargo
through a tender from the spot (or current) market," he said.
move has already led to more purchases by other Indian refiners. State-owned
Bharat Petroleum Corp Ltd (BPCL) too tendered to buy one million barrels of
crude either for loading on August 16-September 5 or delivery on Septeber 26-
importing crude from the US, IOC had to take special permission from the
government policy provides for purchases of crude oil to be made on condition
that the shipping will be done by the Indian carriers (the buyer arranging for
ships to ferry the oil).
in case of US, this was not possible as VLCCs can't load on US ports and crude
has to be first loaded on small ships and at high sea the same is put on a
VLCC," he said.
obtained permission to buy the cargo on a delivered basis where the seller
arranges for the ships.
time we decide to buy US oil, we will have to take this permission," he
said adding the cargo contracted will be delivered at Paradip refinery in the first week of
refiners are joining their Asian counterparts to diversify their crude slate
following the narrowing of the Dubai spreads against West Texas Intermediate
(WTI) and Brent prices in the wake of OPEC/non-OPEC production cut deal.
Sharma said that IOC is
looking at five to six grades of US crude, including Mars crude, for future