US starts crude oil shipment to India with a discount
New Delhi: Indian Oil Corp. Ltd will receive its first crude oil shipment from the US on Monday, after Washington re-entered the export market last year, increasing competition in an already depressed oil market.
An official from the US government on Friday said the shipment containing two million barrels of oil comes at $2 less per barrel than Dubai crude, which makes up a large part of the crude oil mix that state-owned refiners process in India.
Indian Oil and Bharat Petroleum Corp. Ltd will receive eight shipments from the US by March, said the official, who asked not to be named.
“The US’ entrance to the export market brings down costs for consumers and is an opportunity for India to diversify its sources of import,” said the official cited above.
The shipment is part of the strategic energy partnership Prime Minister Narendra Modi and US President Donald Trump agreed to form at a June meeting in Washington. The tie-up may expand to clean energy technology and electric mobility in future. Energy trade between the nations is set to expand as India is taking steps to enhance use of natural gas in its energy mix. India is also expanding its infrastructure for piped natural gas and liquified natural gas used in cooking.
Emails sent to Indian Oil and Bharat Petroleum remained unanswered at the time of publication.
India imported 214 million tonnes (mt) of crude oil in 2016-17, 5.4% more that what the country imported a year ago. With the ambition of becoming a regional refining hub, India is adding more refinery capacity.
Indian Oil, Hindustan Petroleum Corp. Ltd and Bharat Petroleum are in the process of setting up a joint venture refinery-cum-petrochemical complex in coastal Maharashtra, which will be the world’s largest with a capacity of 60 mt. India at present has about 230 mt of refining capacity.