Indian refineries are on the look out to increase purchases of
crude from outside the Middle East and they are testing both U.S. sweet and
sour crudes in their facilities, a common practice when importing crude from
“A lot of these (Indian refiners) want to see what it’s like if
they run it,” said one Houston-based oil broker. “They want to get a taste of
Those refiners are taking advantage of a wide spread between
U.S. oil and other global benchmarks, which has created an attractive discount
on American crude grades.
After the meeting in June of PM Modi and US President Donald
Trump wherein energy exports was discussed, Indian govt has been promoting more
crude imports by waiving some shipping requirements. In fact, Indian refiners
Indian Oil Corp, Bharat Petroleum Corp and Hindustan Petroleum Corporation
Limited were given a special permission by the shipping ministry to import oil
from the United States until March.
After assessing U.S. crude as a replacement for Nigerian
barrels, Hindustan Petroleum Corp Ltd made its first purchase of U.S. oil in
According to Eikon shipping data, one supertanker has already
discharged about 2 million barrels in India earlier this month and two more
with a total of 3 million barrels are expected to arrive in November.
Prior to this, U.S. crude rarely went to India, with only one
month this year – February – showing deliveries, according to U.S. EIA data
In August, IOC bought 950,000 barrels of light sweet Eagle Ford
shale oil and 950,000 barrels of heavy sour Mars crude for end-October delivery
from trading firm Trafigura. In October the company bought 1 million barrels
each of U.S. Southern Green Canyon (SGC) and WTI Midland crude.
In October, India’s Reliance Industries Ltd, the world’s largest
refining complex, purchased 1 million barrels of Midland and a similar-sized
cargo of Eagle Ford crude for November delivery.