HOUSTON/NEW DELHI: US crude oil exports to India hit a record in June andso far this year are almost double last year’s total as the Asian nation’srefiners move to replace supplies from Iran and Venezuela in a win for theTrump administration.
US President Donald Trump’s administration has been pressuring its alliesto cut imports of Iranian goods to zero by November and India’s shiftadvances the US administration efforts to use energy to further itspolitical goals.
The United States has become a major crude exporter, sending 1.76 millionbarrels per day (bpd) abroad in April, according to the latest governmentfigures.
All told, producers and traders in the United States will send more than 15million barrels of US crude to India this year through July, compared with8 million barrels in all of 2017.
The exports to India could go higher if China imposes levies on its US oilimports over the latest round of US tariffs, which could damp Chinesepurchases and lead US crude prices lower.
A. K. Sharma, head of finance at Indian Oil Corp, the country’s toprefiner, said US crude is gaining appeal because of its lower cost, andcould expand further if China cuts its imports of US energy.
“If China levies a tariff on US oil then US imports to India will probablyrise,” he said. “We are looking for a mini-term deal to buy three to fourcargoes of US oil over a period of three to six months instead of buyingsingle cargoes.”
*OPPORTUNITY FOR US*
Last month, India’s oil ministry asked refiners to prepare to limit importsof Iranian oil ahead of US sanctions that take effect in November.
The United States is reimposing sanctions after withdrawing from a 2015agreement with Iran, Russia, China and several Western European countrieswhere Iran agreed to curtail its nuclear activities in return for thelifting of earlier sanctions.
Venezuelan crude shipments to the Asian country also fell 21 percent in thefirst half of this year as production has been hampered by inadequateinvestment, mismanagement and US sanctions.
Adding to its exports crisis, the US has been increasing sanctions onvarious Venezuelan nationals and companies, part of a campaign to pressuresocialist 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.
The Trump administration plans to send a delegation in the coming months toIndia to discuss Iran sanctions and oil issues.
“Our focus is to work with those countries importing Iranian crude to getas many of them as possible down to zero by Nov. 4,” a US State Departmentofficial said.
The world’s fourth largest refiner by capacity is “cutting back on Iraniancrude 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.”