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India Buys First-Ever US Crude
India Buys First-Ever US Crude

India Buys First-Ever US Crude

India Buys First-Ever US Crude

India, the world's third-largest oil importer, will take in crude oil from the United States for the first time after Indian Oil Corp. bought a cargo that will be delivered in October.
The purchase comes after Indian Prime Minister Narendra Modi's visit to the US in June when US President Donald Trump said his country looked forward to exporting more energy products to India, Reuters reported.
IOC bought 1.6 million barrels of US Mars crude, a heavy, high-sulfur grade and 400,000 barrels of Western Canadian Select that will be delivered onboard a very large crude carrier, IOC's head of finance, A.K. Sharma, told Reuters.
PetroChina was awarded the tender to sell the cargoes and is expected to load the oil off the US Gulf Coast, said a trading source with direct knowledge of the sale.
Sharma said the cargo was priced on a delivered ex-ship basis, which is "very competitive" with that of Basra Light.
"So long as the prices remain competitive, we will buy more of the US crude," he said.
"IOC had to obtain special permission from the shipping ministry to buy the cargo on a delivered basis as local regulations favor the use of Indian flagged carriers for imports."
India is the latest Asian country to buy US crude after South Korea, Japan, China, Thailand, Australia and Taiwan sought to diversify oil imports from other regions after the OPEC cuts drove up prices of Middle East heavy-sour crude, or grades with a high sulfur content.
Indian refiners are seeking these heavy, high-sulfur grades as feedstocks after modifications at their plants make it easier to process these types of crudes, which typically sell at a lower cost relative to other oil types.
The US could become an alternative source for the Indian companies for these grades.

 

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