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New Delhi: India, which spent $143 billion to import crude oil last year, plans to diversify its purchases to guard against geopolitical risks in some of the world’s biggest suppliers, the nation’s oil minister said.

Asia’s second biggest energy user wants to buy from the US when the North American nation starts allowing exports, Dharmendra Pradhan said in an interview. India will also look to increase imports from South America and Russia, he said.

The South Asian nation is seeking to secure crude supplies after it was forced to cut purchases from Iran, which faced western economic sanctions, and as fighting in Iraq, Syria and Africa threatens output. Indian Prime Minister Narendra Modi has made energy security a priority for the nation, which imports 80% of its oil.

“Procurement has to be diversified, taking into account the changing geopolitics in the world," Pradhan said in his New Delhi office. “I met a representative from the US government recently and I have already asked for oil from them when they start allowing it. We will look to go to Russia and Latin America if that suits our needs."

India got 61% of its 189.24 million tonnes (mt), or 3.7 million barrels a day, of crude imports in the year ended 31 March from the Middle East, including Iran and Iraq, oil ministry data show. About 16% came from Africa and 17% from South America. Import from Russia was 0.1%.

China, the world’s biggest oil consumer after the US, is also diversifying its suppliers. Growth in Latin American imports to China outpaced the expansion of purchases from the Middle East in the first eight months of the year, according to data from the country’s customs bureau. China bought 8.7% more Middle Eastern crude this year than in 2013, compared with a 20% increase in oil from South America.

Iran was the second biggest supplier to India until three years ago, when it was displaced by Iraq. US-led sanctions forced India’s refiners to cut purchases from Iran to 11 mt in the year ended 31 March, from a peak of 21.8 mt in 2008-09, according to data from the oil ministry. Imports from Iraq were 24.6 mt.

The US currently doesn’t allow export of crude oil. The government in June allowed overseas sale of condensate, which is some times produced along with crude, opening the door to more oil exports, including that produced from shale rocks.

Shale oil has boosted US crude production to 8.9 million barrels a day, the highest level since 1985, according to data from the Energy Information Administration. Natural gas output is 2.3 trillion cu. ft a day, the highest on record.

India wants some of that oil and gas for its $1.9 trillion economy. The five-month old government under Modi has introduced a series of policy changes in the energy sector in the past week. The cabinet freed local diesel prices from state control and increased the price of natural gas produced in the country by about 33% as it seeks to attract investments.

“The government will continue with the reforms process," Pradhan said. “India needs oil technology and investments in a big way." Bloomberg

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