IndianOil has entered into a term contract worth around $1.5bn to import up to 3 million metric tons of crude oil of US origin grades in FY 2019-20.
According to IndianOil, this is the first term contract to be signed by any Indian PSU oil firm for import of US origin crude oil grades. The contract was finalized on 15 February, revealed the Indian state-owned oil and gas company.
The import of US crude oil is part of the company’s strategy to diversify term crude sources and is slated to begin in the financial year, which starts from 1 April, reported The Times of India.
The publication said that the increased import of US crude oil comes in the wake of the economic sanctions against Iran by the US government.
In August 2018, the company signed a term-tender deal to purchase around 6 million barrels of crude oil from the US under single tender with delivery then scheduled between November 2018 and January 2019.
ETEnergyWorld, citing data available on Directorate General of Commercial Intelligence and Statistics (DGCIS), reported that India’s crude oil imports from the US between April and December 2018 surged 294% to 4.58 million tons. This was in comparison to the 1.16 million tons of US crude oil imported by India during the same time window in 2017.
Further, the overall share of India’s crude oil imports from North America grew by 7% in April-December 2018, in comparison to 4.9% in the same period of the previous year.
In August 2017, IndianOil and Bharat Petroleum imported two million barrels of crude oil from the US, which was shipped from ports in Texas and Louisiana and received at Paradip port in the Indian state of Odisha.
In June 2017, the US and India agreed to expand cooperation with each other in energy sector. Subsequently, Indian oil companies including IndianOil had then collectively secured contracts for import of 9 MMTPA of LNG from the US.
Last month, IndianOil said that the 513km long Balasore-Haldia-Durgapur section of its Paradip-Haldia-Durgapur LPG Pipeline was inaugurated by Indian Prime Minister Narendra Modi in Baripada, Odisha.