US state of Texas starts oil shipments to India
August 17, 2017  09:36
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The first shipment of American crude oil is likely to reach India in the last week of September, opening new vistas in the Indo-US ties.
With this, India, the world's third-largest oil importer, joins Asian countries like South Korea, Japan and China to buy American crude after production cuts by OPEC drove up prices of Middle East heavy-sour crude, or grades with a high sulphur content.
"New breakthroughs! oil shipments frm US to India has started," the Indian Embassy in Washington tweeted yesterday after Indian Ambassador to the US, Navtej Sarna, handed over papers for the shipment to the Texas Governor Greg Abbott.
The first lot of two million barrels costs USD 100 million, but given the volume being contemplated by Indian companies, this new development is expected to boost the bilateral oil trade to USD 2 billion.
Consignments of American crude oil left the US shores between August 6-14 and is likely to reach Paradip (Odisha) in the last week of September.
While the 40-year-old ban on export of American oil was lifted by the then US President Barack Obama in December 2015, the real move started during the maiden meeting between Prime Minister Narendra Modi and US President Donald Trump on June 26 when the two leaders agreed to deepen the engagement in the energy sector.
Soon thereafter, Indian companies started purchasing crude from the US. Two Indian oil giants, Indian Oil Corporation and Bharat Petroleum, placed orders for over four million barrels. The development was welcomed by Trump in his phone call with Modi.
"In his call with Prime Minister Modi on Monday, President Trump welcomed the first-ever shipment of American crude oil to India, which will occur from Texas later this month," a State Department spokesperson told PTI.
"The President pledged that the United States would continue to be a reliable, long-term supplier of energy," the spokesperson said in response to a question.
"During the Prime Minister's June visit to the White House, President Trump and Prime Minister Modi committed to a comprehensive review of their trade relations with the goal of creating a fair and reciprocal trading relationship and removing obstacles to growth and jobs creation, including in the energy sector," the spokesperson added.
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