HOUSTON/NEW DELHI: US crude oil exports to India hit a record in June and so far this year are almost double last year’s total as the Asian nation’s refiners move to replace supplies from Iran and Venezuela in a win for the Trump administration.
US President Donald Trump’s administration has been pressuring its allies to cut imports of Iranian goods to zero by November and India’s shift advances the US administration efforts to use energy to further its political goals.
The United States has become a major crude exporter, sending 1.76 million barrels per day (bpd) abroad in April, according to the latest government figures.
A. K. Sharma, head of finance at Indian Oil Corp, the country’s top refiner, said US crude is gaining appeal because of its lower cost, and could expand further if China cuts its imports of US energy.
“If China levies a tariff on US oil then US imports to India will probably rise,” he said. “We are looking for a mini-term deal to buy three to four cargoes of US oil over a period of three to six months instead of buying single cargoes.”
*OPPORTUNITY FOR US*
Last month, India’s oil ministry asked refiners to prepare to limit imports of Iranian oil ahead of US sanctions that take effect in November.
The United States is reimposing sanctions after withdrawing from a 2015 agreement with Iran , Russia, China and several Western European countries where Iran agreed to curtail its nuclear activities in return for the lifting of earlier sanctions.
Venezuelan crude shipments to the Asian country also fell 21 percent in the first half of this year as production has been hampered by inadequate investment, mismanagement and US sanctions.
Adding to its exports crisis, the US has been increasing sanctions on various Venezuelan nationals and companies, part of a campaign to pressure socialist President Nicolas Maduro to make political and market reforms.
Iran and Venezuela are among India’s top five oil suppliers.
Last month, India’s imports of Iranian crude fell by 16 percent from May, paring sharp year-over-year increases during the first half of this year.
“Our focus is to work with those countries importing Iranian crude to get as many of them as possible down to zero by Nov. 4,” a US State Department official said.
The world’s fourth largest refiner by capacity is “cutting back on Iranian crude imports,” said Reid l’Anson, an analyst at cargo tracking firm Kpler. “That’s an opportunity for US producers to sell into the Indian market. Indian demand is quite robust.”