Indian Oil Corporation (IOC) and Bharat Petroleum Corporation Limited (BPCL) have placed orders for 2 million barrels of crude from the US and the first shipment of US crude oil arrived at Paradip Port in Odisha on Monday which is one of the first shipments to India since the US stopped oil exports in 1975.
Going by the market reports, the US crude oil is $2 per barrel cheaper to India compared to the most imported crude from Dubai.
Since the meeting of Prime Minister Narendra Modi and President Donald Trump on June 26 in Washington, the two leaders agreed to expand and elevate bilateral energy trade and cooperation through a tactical partnership which is arranged to develop further as India looks to enhance the use of natural gas and expand its infrastructure for Piped Natural Gas (PNG) and Liquefied Natural Gas (LNG) used for cooking.
Since the meeting, and the subsequent trade agreements the US crude oil shipments to India have become much more crucial than the imports from the old trade partners in the Middle East.
Add to it the price difference per barrel, raising questions about the previous as well as future contracts to be placed for Indian markets by the oil companies.