Chennai: In a first, India’s top oil refiner, IndianOil has signed a $1.5 billion deal to buy oil from the US and the contract is set to begin from April.
“IndianOil has finalised a term contract for import of up to three million tonnes of crude oil of US origin grades as a part of its strategy to diversify term crude sources,” the company said in a statement.
“This is the first term contract finalised by any Indian PSU oil company for import of US origin crude oil grades,” it added.
The year-long contract was finalised on 15 February and is expected to cut India’s dependence on Middle-East suppliers and enhance the country’s bargaining power with them. State refiners have previously purchased US oil in spot market
With the announcement, reports suggest that the US has entered India’s oil supplier list which might turn out to be troublesome for traditional suppliers such as Saudi Arabia, Kuwait and Iraq.
It must be noted that the biggest producer of crude oil in the world has been increasingly offering favourable terms to Indian players in order to address its locational disadvantage.