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US, Caribbean emerging as new hotspots for crude oil imports by India
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The US and Caribbean are emerging as new hotspots for crude oil imports by India as the country looks at newer markets to diversify its energy sourcing basket and insulate itself from pricing and supply shocks.
As part of this, the country's largest public sector oil refiner, IndianOil, has bought its first crude oil cargo from Guyana in July 2021 and has also entered into a term contract with Washington for optional purchase of US grade crude oil.
The company has signed a term contract with Rosneft, National Oil Company of Russia, to source Urals grade crude.
A look at past years data makes things clearer on how US oil is increasing in India's oil import basket. Crude oil imports from the US increased to 1.9 mt in 2017-18, 6.2 mt in 2018-19, and 10.3 mt in 2019-20, based on Petroleum Ministry data.
It had reached close to 15 mt in FY21.
Replying to a question on country's oil import basket in Lok Sabha on Monday, Petroleum Minister Hardeep Singh Puri also said that to ensure security of crude supplies and to mitigate the risk of dependence on crude from single region, Oil Public Sector Undertakings (PSUs) procure crude from countries located at various geographical locations viz. Middle East, Africa, North America, South America, etc.
He also indicated that since the Organization of Petroleum Exporting Countries (OPEC) started with production cuts in May last year, the share of Middle East in the country's oil import basket has been shrinking.
During FY 2019-20, before OPEC imposed a cut, import of crude oil by Oil PSUs from Middle Eastern countries was 69.02 per cent (88.9 mt out of total import of 128.8 mt). But during FY 2020-21, import of crude oil from the Middle East reduced to 63.49 per cent (69.9 mt out of total import of 110.1 mt).
This reduction in import of crude from Middle East is mainly on account of crude oil production cut by OPEC since May 2020, as the countries which are members of OPEC, produce and export crude oil to buyer nations as per their agreed modified quota of OPEC plus.
