IOC to buy 1.9 mn barrels of US crude; first to buy Eagle Ford shale oil
The Dollar Business Bureau
State-owned Oil Corporation Ltd (IOC) purchased 1.9 million barrels of crude from the US in its second tender to import oil from the US, which makes it the first Indian oil company to buy Eagle Ford shale oil, a senior official from the company revealed to the media on Friday.
IOC, India’s largest commercial enterprise, purchased 950,000 barrels of light sweet Eagle Ford shale oil and the same quantity of heavy sour Mars crude from trading company Trafigura, for delivery at October end, A.K. Sharma, Finance Director, IOC, told a leading international news agency.
The recent purchase by IOC comes after an earlier import tender where the refiner purchased 400,000 barrels of Western Canadian Select and 1.6 million barrels of Mars crude.
Due to cuts in global oil supplies, Indian refiners set their sights towards crude purchases from the US as they are looking to diversify their sources for crude imports.
Rising output and supply from the US have also made the economics of arbitrage possible for Indian imports.
State-owned Bharat Petroleum Corporation Ltd (BPCL) was the first Indian oil company to purchase 1 million barrels of low-sulphur West Texas Intermediate (WTI) Midland crude this month, whereas another Indian refiner Hindustan Petroleum Corporation Ltd (HPCL) has announced that it is planning to purchase low-sulphur crude from the US.
India is the third-biggest consumer of crude oil after the US and China. The country mainly imports crude oil from OPEC countries such as Saudi Arabia and Iran to meet its demand. The crude oil demand in India averaged around 4.39 MMbpd in 2016.