India has started importing crude oil from the United States for the first time. India’s first ever purchase of crude oil by Indian Oil Corporation (IOC) from the U.S. will be delivered in September this year.
IOC reportedly bought 1.6 million barrels of high-sulfur grade U.S. Mars crude oil and 400,000 barrels of Western Canadian Select.
Bharat Petroleum Corporation also announced that it had become the second Indian company to buy oil from the U.S.
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.
The primary energy consumption in India is the third biggest after China and USA with 5.5% global share in 2016.
India is the world’s third-largest oil importer and latest Asian country to buy U.S. crude after South Korea, Japan, China, Thailand, Australia and Taiwan.
India’s oil imports from Iran have fallen to their lowest levels due to tensions between the two countries over the awarding of the Iranian Farzab B gas field.
Iran has also cut short the credit period it offers Indian companies for oil they buy, from 90 days to 60 days.
In earlier this year, Iran has become India’s third largest oil supplier as easing western sanctions enabled Indian companies to increase purchases from that country.
Saudi Arabia and Iraq continue to be ahead of Iran, which was sixth biggest supplier of crude oil to India. It has overtaken Venezuela, Nigeria and UAE to become India’s third largest supplier.