The Strategist

Indian Oil Corp. concludes first annual deal to import American oil

02/19/2019 - 11:43

Indian Oil Corp., India's largest refiner, has signed its first annual contract for the supply of American oil, Reuters reported.

Paul Lowry via flickr
Paul Lowry via flickr
The company will buy an average of 60 thousand barrels per day totaling $ 1.5 billion during the year until March 2020. The seller is the Norwegian Equinor.

Previously Indian Oil Corp. bought American oil only on the spot market. Last year, the company acquired 6 million barrels of oil from the United States under a short-term contract for the period from November to January of this year.

Indian Oil covers about 75% of its oil needs through long-term deals, mainly with OPEC countries.

However, the company wants to diversify sources of raw materials, especially in light of the increasingly complex geopolitical situation.

“There are a lot of geopolitical issues around. We expect large volumes to leave Venezuela, West Africa and Iran, so it makes sense to have guaranteed deliveries from the United States, where oil production is increasing,” FGE analyst told Reuters.

In the first half of February, India became the leader in purchasing crude oil from Venezuela, increasing imports by 66% compared with the previous month to 620 thousand bpd.

Oil refining companies such as Reliance Industries Ltd. and Nayara Energy Ltd became the largest buyers of the commodity from Venezuela in India.


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