The first shipment of American crude is likely to reach India in the last
week of September, opening up new options for sourcing when OPEC is slashing
its output to ensure prices go up in the international market. Availability of
US crude is expected to have a sobering effect on the market and prices
With this India, joins Asian countries like South Korea, Japan and China to
buy American crude after production cuts by OPEC drove up prices of Middle East
crude, and grades with a high sulphur content.
"New breakthroughs oil shipments from US to India+ has started,"
the Indian Embassy in Washington tweeted on August 16 after Indian Ambassador
to the US, Navtej Sarna, handed over papers for the shipment to the Texas
Governor Greg Abbott.
The first lot of two million barrels costs 100 million US Dollars. It has
opened New Vistas in India US Cooperation- tweeted the Indian Embassy in
Consignment of American crude left the US shores between August 6-14 and is
likely to reach Paradip (Odisha) in the last week of September.
Though the ban on export of American oil was lifted by former US President
Barack Obama two years ago, the breakthough on oil purchase was decided during
the meetingt meeting between Prime Minister Narendra Modi and US President
Donald Trump on June 26 when the two leaders agreed to deepen the engagement in
the energy sector.
Indian oil companies swung into action and purchased crude from the US. Two
Indian oil giants, Indian Oil Corporation and Bharat Petroleum, placed orders
for over four million barrels. In his call to Prime Minister Modi on aaugust 14
the President Trump welcomed the first-ever shipment of American crude oil to
India, which will occur from Texas later this month, a State Department release
"The President pledged that the United States would continue to be a
reliable, long-term supplier of energy.
The Indian Oil Corporation placed its first order last month and the second
order on August 10. BPCL has bought a
cargo containing 5,00,000 barrels of crude for delivery from September 26 to
October 10. Hindustan Petroleum Corp Ltd (HPCL) is also looking at buying US
Even after including the shipping cost, buying US crude is cost competitive
to Indian refiners, industry sources said.
While this is the first crude oil import from the US, Indian companies have
made significant investment in purchasing energy assets in the United States.
Four Indian public and private sector companies have invested approximately $ 5
billion in shale assets in the US.
In a tweet a day earlier, Senator Ted Cruz said Texas will provide crucial
oil exports to India and serve as a reliable long-term supplier of energy.
Texas Governor said in the decades to come this relationship will continue
to be one of the world's most significant as the United States and India work
toward common goals of prosperity, strength and peace.