Indian Oil Corp has bought another cargo of U.S. West Texas Intermediate for delivery in October, Reuters reported today, citing unnamed industry sources.
The deal is part of a recent streak of U.S. oil purchases following President Trump’s threat to impose additional tariffs on Indian exporters to the United States if the country continues buying Russian crude.
The October deal was priced at a premium of between $2.80 and $2.90 to dated Brent, Reuters’ sources said.
It is price that pushed India to step up Russian oil purchases in the first place, turning Russia from a minor exporter to the subcontinent, into one of its top crude oil suppliers, accounting for about a third of total imports.
India’s government reacted negatively to Trump’s threat, saying it had no intention of suspending oil imports from Russia, noting that the United States and the European Union were still buying energy commodities from Russia despite a barrage of energy sanctions on the latter.
Yet reports have been coming in about a pivot to U.S. oil as well as oil from other regions. Earlier this month, Indian Oil Corp. bought 2 million barrels of U.S. Mars crude, another 2 million barrels of Brazilian oil, and 1 million barrels of Libyan crude, Reuters sources said last week. These deals follow the securing of 8 million barrels by Indian Oil Corp. from sellers in the Middle East, the United States, Canada, and Nigeria.
Meanwhile, however, Tankers loaded with Russian crude that had stayed idle off India’s coast for days discharged their cargo at Indian oil import terminals earlier this month, in defiance of the U.S. threats, Bloomberg reported, with the total discharged at 3 million barrels of Russian Urals, the flagship grade that Russia exports to Asia.
Shunning Russian oil entirely would add an estimated $20 billion to India’s oil import bill over a period of two years, according to analyst calculations.
By Charles Kennedy for Oilprice.com
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