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India boosted significantly crude oil imports from the United States in February, while it slashed purchases from the world’s top oil exporter, Saudi Arabia, to the point of America overtaking the Saudis as India’s second-largest oil supplier, trade data obtained by Reuters showed on Monday.
The world’s third-largest oil importer, India, has been trying to diversify its crude oil imports and not rely too much on Middle Eastern oil in recent months. This has been exacerbated by OPEC+ policies to tighten the market and lift oil prices, which hurt India’s oil consumption and economy.
This year, the OPEC+ cuts and the extra Saudi cuts have decreased the availability of Saudi crude on the market. On the other hand, the widening discount of WTI Crude to Brent Crude at the end of last year and at the start of this year favored increased purchases of U.S. crude oil from India, Refinitiv analyst Ehsan Ul Haq told Reuters.
According to data Reuters has obtained from trade sources, India’s crude oil imports from the U.S. surged by 48 percent month over month to a record 545,300 barrels per day (bpd) in February. The U.S. thus became the second-largest oil supplier to India, behind Iraq.
Saudi Arabia, which has been either the top or the second-largest supplier to India for the past decade and a half, slipped to number four in February, with Indian imports of Saudi oil crashing by 42 percent on the month to a decade-low of 445,200 bpd, according to the data obtained by Reuters.
India could keep reduced imports from Saudi Arabia this month and next, after criticizing the OPEC+ “artificial cuts to keep the price going up.”
India relies on imports for more than 80 percent of its consumption and imports 60 percent of its crude from the Middle East. India is now reportedly asking its state-owned refiners to aggressively look to diversify imports away from the Middle East as the world’s third-largest oil importer isn’t happy with the OPEC+ policies to tighten the oil market and lift oil prices.
By Charles Kennedy for Oilprice.com
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Charles is a writer for Oilprice.com