India becomes largest buyer of US crude in first quarter of 2021
Indian refiners were the second largest buyer of US crude in calendar year 2020 snapping up 287,000 barrels per day
India has emerged as the top buyer of US crude in the first quarter of calendar year 2021 from second-biggest buyer last year as the world’s third largest oil consumer looks at alternate sources of crude amidst a spat with Saudi Arabia, the world’s largest producer, to lift output curbs, and rein in prices.
Indian refiners were the second largest buyer of US crude in calendar year 2020 snapping up 287,000 barrels per day which was 26 per cent more than 2019, accounting for just below a tenth of the total US crude exports in 2020, according to industry data and officials at state-run oil firms.
As Saudi Arabia staved off India’s request to boost production to cool prices, Indian refiners replaced some of the Saudi volumes with US cargoes at the behest of the government, an executive with one of the state-run oil refiners said.
This reflected in a marked change in crude sourcing with India becoming the biggest buyer of US crude, importing an average of 421,000 b/d of U S crude between January and March. This was more than the volumes bought by South Korea at 313,000 b/d and China with 295,000 b/d, industry data showed.
In 2020, China was the top buyer of US crude with average volumes quadrupling to 461,000 b/d compared to 2019.
US oil exports resumed in January 2016 after a 40-year ban and export volumes averaged 2.9 million b/d in 2020, growing at 8% year-on-year.
India imports 85 per cent of its oil needs and Oil Minister Dharmendra Pradhan had in recent days urged OPEC and its allies, known as OPEC+, to pump more crude to check galloping prices that was hurting India’s economic recovery.
As part of its crude sourcing diversification strategy, Indian refiners have recently bought crude from new producers such as Guyana.
Iraq is India’s top supplier of crude. Middle East has been the favourite crude sourcing destination for Indian refiners because of close proximity and lower freight rates.
In comparison, the voyage distance is more than eight times longer from the US Gulf to India than from the Middle East, translating into longer transit times and higher freight costs.