US oil exports to India soar ahead of sanctions on Iran

HOUSTON/NEW DELHI: US crude oil exports to India hit a record in June and so far this year are almost double last year’s total as the Asian nation’s refiners move to replace supplies from Iran and Venezuela in a win for the Trump administration.
US President Donald Trump’s administration has been pressuring its allies to cut imports of Iranian goods to zero by November and India’s shift advances the US administration efforts to use energy to further its political goals.
The United States has become a major crude exporter, sending 1.76 million barrels per day (bpd) abroad in April, according to the latest government figures.
All told, producers and traders in the United States will send more than 15 million barrels of US crude to India this year through July, compared with 8 million barrels in all of 2017.
The exports to India could go higher if China imposes levies on its US oil imports over the latest round of US tariffs, which could damp Chinese purchases and lead US crude prices lower.
A K Sharma, head of finance at Indian Oil Corp, the country’s top refiner, said US crude is gaining appeal because of its lower cost, and could expand further if China cuts its imports of US energy.
“If China levies a tariff on US oil then US imports to India will probably rise,” he said. “We are looking for a mini-term deal to buy three to four cargoes of US oil over a period of three to six months instead of buying single cargoes.”
OPPORTUNITY FOR US: Last month, India’s oil ministry asked refiners to prepare to limit imports of Iranian oil ahead of US sanctions that take effect in November.
The United States is reimposing sanctions after withdrawing from a 2015 agreement with Iran, Russia, China and several Western European countries where Iran agreed to curtail its nuclear activities in return for the lifting of earlier sanctions.
Venezuelan crude shipments to the Asian country also fell 21 per cent in the first half of this year as production has been hampered by inadequate investment, mismanagement and US sanctions. Adding to its exports crisis, the US has been increasing sanctions on various Venezuelan nationals and companies, part of a campaign to pressure socialist President Nicolas Maduro to make political and market reforms. — Reuters