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According to Reuters, Indian Oil Corp., the country's largest oil refiner, has signed its first annual crude oil deliveries contract from the United States, citing a statement by the company's president.
IOC will purchase an average of 60,000 barrels per day for a total price of US $ 1.5 billion by March 2020. The seller is the Norwegian equine seller. Previously, Indian Oil Corp. had only bought US crude on the spot market. Last year, recalls Reuters, the company bought 6 million barrels of US crude under a mini-term agreement for the period from November to January this year.
Most oil imported by the refiner, however, comes from OPEC under long-term agreements (75%). Although this approach is traditional, the company now wants to diversify its sources of products, especially given the geopolitical situation increasingly difficult.
"There are many geopolitical issues. We expect many volumes to leave Venezuela, West Africa and Iran. So it makes sense to have guaranteed term supplies from the United States, where crude oil production is increasing, "FGE analyst Sri Paravaikkarasu told Reuters.
However, at present, India is extracting more oil from Venezuela. This month, the country became the largest importer of Venezuelan crude, receiving daily more than 600,000 barrels a day in the first two weeks of February, up 66 percent from the previous month. The largest buyers of Venezuelan crude were Reliance Industries and Nyara Energy, in which Rosneft holds a 49% stake.
The diversification of crude oil sources is particularly important for India, which is one of the main drivers of growth in global oil demand. Last month, Wood Mackenzie predicted that Indian oil demand would continue to grow at 245,000 barrels a day, the same level as last year, when it accounted for 14% of global growth.
By Irina Slav for Oilprice.com
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