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Pressure Tactic: First Shipment of US Oil to Reach India by September End



India has been asking oil cartel OPEC to stop charging “unfair” premium from Asian buyers in order to incentivize western markets.

New Delhi (Sputnik) — India will receive its first shipment of crude oil from the United States in September this year. In a bid to diversify its energy risks, India is exploring the option of importing oil from countries that are not part of Organization of the Petroleum Exporting Countries (OPEC). This is also being seen as an attempt by India to exert pressure on OPEC to slash prices and stop charging premium from Asian buyers.

"Signed, sealed & delivered! Amb @NavtejSarna handing over cargo manifest for 1st ever crude oil shipment from the US to Texas Governor. New breakthroughs! Oil shipments from the US to India have started," the Indian Embassy in Washington tweeted.




​The first lot comprises two million barrels of crude worth US$ 100 million. India's state owned oil companies IOCL & BPCL have placed orders for over six million barrels in last one month. As soon as some of the American fields are able to produce oil economically at $25 a barrel, these Indian companies are expected to place more orders of up to $2 billion.

"It is not meant to put pressure on OPEC. India is trying to diversify supplies and reduce its dependence on any one geography or region as the part of energy security strategy," Narendra Taneja, India's leading energy expert told Sputnik.

However, some recent developments suggest that this could be India's tactical step to exert pressure on OPEC which has turned down India's repeated request to cut Asian premium. Dharmendra Pradhan, India's Minister of Petroleum had repeatedly asked OPEC to stop charging premium from Asian buyers, calling it "unfair."

"As a large import destination, there should be no ‘Asian Premium' on the crude supplied to India and Asian buyers. India is very price sensitive. We are free to import oil from any part of the world including more supplies from Russia," Pradhan had said in May this year.

Countries like China, South Korea, and Japan had also moved towards American market for cheaper oil after production cuts by OPEC drove up prices of heavy-sour crude in the international market.


India is one of the biggest importers of heavy grade crude. About 86% if India's import of crude oil, 70% of natural gas and 95% of LPG are from OPEC countries. India wants OPEC to work towards "responsible pricing", which would allow India to provide energy to people who have been deprived of energy so far.

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