India’s first ever purchase of crude oil from the U.S. will be delivered in September, according to an Indian Oil Corporation (IOC) official, who added that the company’s deal with the U.S. resulted in cheaper oil for India than even Basra Light because the U.S. could sell at highly competitive rates, and the company transporting the shipment — PetroChina — had provided ‘very favourable’ terms of trade.
IOC reportedly bought 1.6 million barrels of high-sulfur grade U.S. Mars crude oil and 400,000 barrels of Western Canadian Select. “The prices we are getting from America are very competitive, even when compared to the prices of Basra Light,” the IOC official told The Hindu on the condition of anonymity. “Added to that, this deal has PetroChina as the trader, which will transport the oil to India and the price of transport is also very low. Each order has specific dimensions to it, and this order has a Chinese company doing the transport. The delivery of the order is around September.”
The deal with the U.S., signed earlier this month, comes at a time when India’s oil imports from Iran have fallen to their lowest levels in more than a year due to tensions between the two countries over the awarding of the Iranian Farzab B gas field. Iran has also cut short the credit period it offers Indian companies for oil they buy, from 90 days to 60 days. The IOC officials, however, did not mention Iran as the reason why Indian companies are now looking to other sources for their oil imports. “As long as the price is low from these other sources, we will continue considering them for supply,” he said. Bharat Petroleum Corporation also announced in July that it had become the second Indian company to buy oil from the U.S.