Indian Oil Corp., the country's largest oil refiner, has signed its first annual US crude oil deliveries contract, Reuters reports, and quotes a statement from the company's leader.
The IOC will buy an average of 60,000 bpd for a total price of $ 1.5 billion a year to March 2020. The seller is Norway's Equinor. Previously, Indian Oil Corp. only bought US commodities on the spot market. Last year, Reuters reports that the company bought 6 million barrels of US crude oil during a mini-term for the period November to January this year.
However, most of the oil from the refinery imports comes from OPEC in the long term agreements, at 75 per cent. Although this has been the traditional approach, the company wants to diversify its sources into the product, especially in the light of the increasingly difficult geopolitical situation.
"Many geopolitical issues are going around. We expect a lot of volume going away from Venezuela, West Africa and Iran, so it makes sense to have guaranteed US thermal supply, where crude production is increasing," said Sri Paravaikkarasu, FGE analyst , to Reuters.
But now India is taking more oil from Venezuela. This month, the country was the largest importer of Venezuelan crude, received it at a daily rate of over 600,000 bpd during the first two weeks of February, or up 66 percent from a month ago. The largest buyers of Venezuelan raw materials were Reliance Industries and Nyara Energy, where Rosneft owns a 49 percent interest.
The diversification of the crude source is particularly important for India, which is one of the major drivers of global demand growth. Last year, the Wood Mackenzie forecast for India will continue to grow by 245,000 bpd, the same as last year, as it represented 1
By Irina Slav for Oilprice.com
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