India looks to US crude, steps away from Middle East
New Delhi: India is set to emerge as a key market for American crude exports in coming months, as refineries are ramping up “test” purchases of US grades to diversify their imports.
US exports recently set a weekly record with nearly 2 million barrels of crude a day sent overseas. But shipments to India have been rare, with just a few deliveries since the US lifted its ban on crude exports in late 2015.
Indian refineries are starting to increase purchases as the country seeks to secure more supply from outside the Middle East. Refiners are testing both US sweet and sour crudes in their facilities, a common practice when importing crude from new sources.
Those refiners are taking advantage of a wide spread between US oil and other global benchmarks, which has created an attractive discount on American crude grades.
In June, Prime Minister Narendra Modi and US President Donald Trump met and discussed energy exports to India. Since then the Modi administration has been encouraging more crude imports by waiving some shipping requirements.
Prior to this, US crude rarely went to India, with only one month this year – February – showing deliveries, according to US EIA data through July.