India imports US crude for first time

The world’s third-largest oil importer, has sealed a first deal to import crude oil from the US and the shipment is expected to touch Indian shores in October. The deal, by state-owned Indian Oil Corp (IOC), comes within weeks of Prime Minister Modi’s visit to the US when President Trump talked of his country looking to export more energy products to India.

"We have bought 2 million barrels of crude oil from North America comprising 1.6 million barrels of US Mars crude and 400,000 barrels of Western Canadian Select," IOC Director (Finance) A K Sharma told PTI here. US Mars is a heavy, high-sulphur grade which will be processed at IOC’s newest refinery at Paradip in Odisha.

"Given the current international oil markets where the differential between Brent (the benchmark crude or marker crude that serves as a reference price for buyers in western world) and Dubai (which serves as a benchmark for countries in the east) has narrowed. "Even after including the shipping cost, buying US crude proved to be very cost competitive to us and so we bought one very large crude carrier (VLCC) cargo through a tender from the spot (or current) market," he said. Sharma said the company will buy more crude from the US if the market conditions remain favourable for such purchases. The IOC move has already led to more purchases by other Indian refiners. State-owned Bharat Petroleum Corp Ltd (BPCL) too tendered to buy one million barrels of crude either for loading on August 16September 5 or delivery on Septeber 26- October 15.But for importing crude from the US, IOC had to take special permission from the shipping ministry. "Indian government policy provides for purchases of crude oil to be made on condition that the shipping will be done by the Indian carriers (the buyer arranging for ships to ferry the oil).

The IOC move has already led to more purchases by other Indian refiners. BPCL too has tendered to buy one million barrels of crude