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Indian Oil Corporation (IOC), the country’s biggest refiner and fuel retailer, has issued a tender to import a total of up to 24 million barrels of crude oil from the United States between October this year and March next year, Reuters reported on Monday, citing tender documents it has seen.
IOC wants to import 2 million barrels each month for the six months after October 2020, plus an option for another 2 million barrels of oil from the U.S. every month during that period, according to the documents.
India has already boosted its imports of U.S. crude oil after the United States ended the waivers for Iranian oil customers when it stepped up the sanctions pressure on Iran’s regime last year.
India, the world’s third-largest importer, started importing U.S. crude oil on a regular basis in 2017. In two years, Indian imports of American oil jumped tenfold—from 9.6 million barrels a year in 2017 to 93.34 million barrels per year in 2019, according to EIA’s annual data of U.S. crude oil exports to India.
During the period April to September 2019, the United States overtook OPEC’s heavyweight Kuwait to become India’s six-largest supplier of crude oil, after boosting its exports by 70 percent compared to the same period of 2018.
Meanwhile, India saw its imports from OPEC producers slump to a 19-year-low in the fiscal year 2019/2020 ended in March, while imports from the United States, the Mediterranean, and Latin America increased.
India’s refiners have been seeking to diversify their 80-percent oil import dependence that they have on OPEC, and lately, there has been a favorable price spread between Brent Crude and WTI Crude, making imports from the US particularly attractive.
Imports from the United States represented 4.5 percent of India’s crude imports, up from 3 percent in the prior fiscal year. The U.S. became the seventh biggest oil supplier to India in the year through March 2020, climbing up from the 9th place in the top suppliers’ list in 2018/2019, according to the data compiled by Reuters.
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.