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India more than quadrupled its imports of U.S. crude oil between November last year and May this year as the U.S. sanctions on Iran significantly reduced Iranian crude purchases at refiners in India, which was Iran’s second-largest oil customer until last month.
According to tanker arrival data that Reuters has obtained from industry and shipping sources, the growth in U.S. oil supplies to India was significantly higher than the increase of Indian purchases of oil from its traditional Middle Eastern sources of supply.
Between November 2018 and May 2019—the period in which the U.S. slapped sanctions on Iran’s oil exports allowing six-month exemptions for the largest buyers, including India, and the end of those waivers in May—Indian refiners bought around 184,000 bpd of U.S. crude oil, up from just 40,000 bpd in the same period the previous year.
Between the start of the U.S. sanctions and the end of all waivers for Iranian buyers, India’s intake of Iranian crude oil slumped to 275,000 bpd, down by 48 percent on the year, according to the tanker data cited by Reuters.
During the November-May period, India’s purchases of Saudi crude oil increased by 11 percent to 804,000 bpd and imports from the United Arab Emirates (UAE) surged by 37 percent to 360,000 bpd, while purchases from Iraq went down 3.3 percent to 1.01 million bpd.
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Although the volumes from the U.S. were low compared to those of India’s traditional Middle Eastern suppliers, the growth in U.S. imports obliterated the rise in Middle East shipments, also because the official selling prices (OSPs) of Saudi Aramco and other Middle East oil producers have been higher, enabling the U.S. to sell its oil to India.
The U.S. moved in to fill part of the gap from Iranian supplies and is keen to further increase its crude oil sales to India.
Earlier this month, U.S. Secretary of State Mike Pompeo said that the U.S. wants to deliver more liquefied natural gas (LNG) and crude oil to India.
“These steps will give Indians reliable, affordable, diversified energy independence so they will no longer have to rely on difficult regimes like those in Venezuela and in Iran,” Secretary Pompeo said at a U.S.-India business meeting on June 12.
By Tsvetana Paraskova for Oilprice.com
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Tsvetana is a writer for Oilprice.com with over a decade of experience writing for news outlets such as iNVEZZ and SeeNews.