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India increased its intake of U.S. crude oil last month while reducing imports of Saudi crude after the Kingdom increased the official selling price for the commodity.
Reuters cites shipping data as revealing the total share of OPEC oil in India’s oil import mix fell to 73 percent in October from the average of 80 percent it usually accounts for. This must be mostly due to the reduced intake of Saudi oil because at the same time Indian refiners increased their purchases of Iraqi and Nigerian oil, among others.
Iraq became India’s largest oil supplier last month, the data showed, replacing Saudi Arabia at the top spot. The Kingdom remained the second-largest supplier of oil to India, followed by Nigeria and the United States, which shipped a record 336,000 bpd of oil to India in October, accounting for about 7.5 percent of total oil imports.
“Indian demand for gasoil has been falling but overall Asian demand has been relatively strong because of new marine fuel rules from January. And good diesel cracks is prompting refiners to buy distillate rich crudes like that of Nigeria,” a Refinitiv analyst told Reuters.
Yet all in all, India imported 3.3 percent less oil in October 2019 than a year earlier, with the daily average at 4.56 million barrels. Its diversification into U.S. oil followed the imposition of sanctions against Iran, when the U.S. made clear it would really appreciate it if India stopped its purchases of Iranian oil and replaced them with U.S. crude.
While India seems to have heeded this suggestion, it is still buying oil from another sanctioned country: Venezuela. Shipping data recently showed that Venezuela was exporting more than half a million barrels of oil daily, with most of this going into China and India.
India imports as much as 80 percent of the oil it uses, but the government has plans to reduce this substantially and with it, its often costly dependence on international oil markets.
By Irina Slav for Oilprice.com
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Irina is a writer for Oilprice.com with over a decade of experience writing on the oil and gas industry.
As if this is not enough, the article made an inaccurate claim. It said that India heeded the United States’ advice implying that it stopped importing Iranian crude oil. This is a plain lie. India said from the start that it doesn’t recognize US sanctions against Iran and it will therefore ignore them and continue to import Iranian crude oil and that is what India has been doing all through accounting for 28% of Iranian oil exports.
Moreover, India and also China are continuing to defy US sanctions against Venezuela and buy Venezuelan crude oil with Russia continuing to help Venezuela sell its crude and get paid for it.
Dr Mamdouh G Salameh
International Oil Economist
Visiting Professor of Energy Economics at ESCP Europe Business School, London