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Saudi Aramco offers to increase oil supply to India

IANS  |  New Delhi 

The world's largest company will provide additional to domestic refiners to meet shortages arising from the US decision to lift sanction waivers from major oil importing countries, including

Sources in state-run oil companies said that the Saudi Arabian has offered to increase supplies to by 200,000 barrels a day (bpd) that would meet almost half of the country's that was coming from

On an annual basis, 200,000 bpd of oil equals about 10 million tonne (mt) of oil per year. imported 23.9 mt of from in FY19, making the Gulf country the third biggest exporter of oil after and

Aramco's offer to Indian oil companies is for deliveries starting June. The is also expected to get clearer from June when the full might of US sanctions would come into play. Though US sanction waiver was lifted from May 2, India is still getting some oil from Iran on contracts reached earlier.

Sources said that while the Saudi offer of increased has generally been welcomed by domestic oil companies as it will help alleviate the squeeze driven by US sanctions on Iran and Venezuela, the supply is unlikely to be made on terms given by Iran. In fact, refiners would face a heftier bill on Arab light crude.

Iran used to offer Indian refiners 60 day credit for and also gave discounts on freight and insurance. on the other hand charges an Asian premium for its to India.

It is for this reason that India has been expanding the list of markets to prevent disruptions in one part of the world from affecting its supplies.

India imports more than 80 per cent of its and it is thus imperative for it to ensure that supply lines are maintained at all times.

With Iran and Venezuela, which is the fifth largest supplier of crude to India, coming under US sanctions, India has also started exploring from other Latin American countries such as and with which it has shared a healthy economic relationship.

Indian oil companies are also exploring raising imports from African countries and looking at the US

According to data from the of and Statistics, sold 46.61 to India during FY19, which is two per cent more than the 45.74 mt it had supplied in FY18. This helped to become the top to India.

India provisionally imported 207.3 mt of crude oil in FY19, down from 220.4 mt in the previous financial year.

has traditionally been India's top oil source, but it came second in FY19. In 2018, Saudi Arabia exported 40.33 mt oil, up from 36.16 sold in the previous year. Iran on the other hand sold 23.9 mt of crude in FY19, up from 22.59 mt in the previous year.

UAE topped to become India's fourth-largest crude supplier. It sold 17.49 mt of crude oil to India in FY19 against 17.32 mt of oil coming from



(This story has not been edited by Business Standard staff and is auto-generated from a syndicated feed.)

First Published: Wed, May 08 2019. 17:16 IST