Buying of American crude could boost India-US oil trade to $2 bn
The Dollar Business Bureau
With the first shipment of two million barrels of US crude oil, costing about $100 million, expected to reach India by the end of September and the volume of crude oil that India could buy in the future, it is very likely that the bilateral oil trade between the two countries could increase to $2 billion.
With this, India will be in the league of Asian countries such as Japan, South Korea and China in purchasing American crude oil after OPEC reduced its production, leading to a price increase of the heavy-sour crude of Middle East.
Tweeting about the development, the Indian Embassy in Washington said, “New breakthroughs! Oil shipments frm US to India has started,” on Wednesday, after the Ambassador of India to the US, Navtej Sarna, handed over documents of the shipment to Greg Abbott, the Governor of Texas.
“Opening New Vistas in India US Co-opn,” the Indian Embassy said in another tweet.
Shipments of crude oil left the shores of US between August 6 and 14 and are expected to reach the port of Paradip in Odisha in the last week of September.
In December 2015, the then US President Barack Obama had lifted the four-decade-old ban on the exports of American oil. However, things materialised after the meeting between President Donald Trump and Prime Minister Narendra Modi on June 26, during which the two leaders agreed to strengthen their engagement in the energy sector.
Indian firms started placing orders for the American crude oil after that. Two state-run oil companies, Indian Oil Corporation Ltd (IOC) and Bharat Petroleum Corporation Ltd (BPCL), placed orders for more than 4 million barrels of American crude.
The first order was placed by IOC in July and second order in August. BPCL purchased 500,000 barrels each of Poseidon and Mars for delivery between September 26 and October 10. Hindustan Petroleum Corp Ltd (HPCL) is also looking at purchasing American crude oil.