India’s top crude oil supplier is no longer Saudi Arabia, it is Iran. Saudi Arabia has traditionally has been India’s top oil source but in the April-October period of 2017-18, Iraq dethroned it due to its discounted price. Iraq has overtaken Saudi Arabia for the first time to become India’s top crude oil supplier in the current fiscal, helped by sales of discounted heavy crude, Oil Minister Dharmendra Pradhan said on Monday.
In a written reply to a question in the Lok Sabha, Dharmendra Pradhan said Saudi Arabia supplied 21.9 million tonnes of crude oil in the first seven months of 2017-18, while Iran supplied 25.8 million tonnes. India’s lower Saudi purchases were partly due to firmer Saudi prices following the production cuts by the Organization of the Petroleum Exporting Countries (OPEC) since January.
Iran, facing the potential threat of further US sanctions, has also cut oil prices in efforts to retain Asian customers and boost the appeal of its crude compared with other Middle Eastern supply. India’s imports of Iraqi oil surged in November when Basra Light discounts widened to 30-70 cents a barrel compared with official selling prices.
Japanese and Indian buyers responded to the price cuts for October by increasing imports and are expected to keep volumes elevated due to competitive prices, trade sources told Reuters.
Meanwhile, India also explored purchasing oil from the United States. The first shipment of crude oil from the US worth $100 million reached the Indian shores this year. Indian companies started purchasing crude from the US soon after Donald Trump and Narendra Modi agreed to deepen the engagement in the energy sector.
India imported 125.8 MT of crude oil in the April-October period for USD 45.1 billion. In 2016-17, crude oil
imports stood at 213.9 MT, costing USD 70.2 billion.