US Becomes India’s Second Biggest Oil Supplier

The United States has become the second biggest oil suppliers of India by overtaking Saudi Arabia. This shift comes after the refiners boosted cheaper U.S. crude purchases to a record levels in order to offset the OPEC+ supply cuts.

Key points

The switch in supplies were triggered by the lower U.S. crude demand. It was also coincided with the voluntary extra 1 million bpd output cut by the Saudi Arabia in line with the agreement of Organization of Petroleum Exporting Countries and its allies (OPEC+) so as to maintain the lower production.

India’s oil import

The oil import of India from the world’s top producer, United States had increased to 48 per cent to stand at a record of 545,300 barrels per day (bpd) in February 2021.  This accounted for 14 per cent of the overall imports of India in February.  On the other hand, the import of India from Saudi Arabia decreased by 42 per cent from January 2021. It fell down to a decade-low of 445,200 bpd. As a result, Saudi Arabia, which has consistently been one of top two suppliers of oil to India, fell down to position 4 for the first time since 2006.

Background

India is the third biggest oil importer and consumer in the world. The country had repeatedly been calling on the major oil producers in order to ease the supply curbs and aid the global economic recovery. India had also pointed to Saudi Arabia’s voluntary cuts in contributing to increase in the price of oil globally.

Top seller

As per the data, Iraq continued to be the top oil seller to India. The top position was maintained even though the oil purchases have declined by 23 per cent in five-month low to 867,500 bpd. Iraq has also cut the annual supplies of oil to Indian refiners by 20 percent in 2021 to meet the obligations under the OPEC’s production deal.

Month: Current Affairs - March, 2021