First US crude oil shipment set to arrive next month
Washington DC: The first shipment of American crude oil worth $100 million will reach India next month, with US President Donald Trump promising to be a "reliable, long-term supplier" of energy to India's developmental needs.
The shipment of crude oil to India comes nearly two years after the then US president Barack Obama lifted the 40-year- old ban on its export.
During their maiden meeting on June 26, Prime Minister Narendra Modi and US President Donald Trump agreed to deepen the engagement in the energy sector.
Soon, 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.
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 the Organisation of the Petroleum Exporting Countries drove up prices of Middle East heavy-sour crude, or grades with a high sulphur content.
"New breakthroughs! oil shipments from US to India has started," the Indian Embassy in Washington tweeted on Wednesday after Indian Ambassador to the US, Navtej Sarna, handed over papers for the shipment to Texas Governor Greg Abbott. The first lot of two million barrels costs $100 million, but given the volume being contemplated by Indian companies, this new development is expected to boost the bilateral oil trade to $2 billion.
"Opening New Vistas in India US cooperation," tweeted the Indian Embassy which also posted several pictures and a video of the event.
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.
The development was welcomed by Trump in his phone call with Modi on Monday, on the eve of India's Independence Day.
"In his call with Prime Minister Modi on Monday, President Trump welcomed the first-ever shipment of American crude oil to India...," a State Department spokesperson said.
"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.
The Indian Oil Corporation (IOC) Ltd placed its first order in July and the second order on August 10. Bharat Petroleum Corp Ltd (BPCL) made its first purchase of US oil, buying high Sulphur crudes Mars and Poseidon.