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IOC buys third shipload of US crude oil

Press Trust of India  |  New Delhi 

Corp (IOC) today bought its third shipload or cargo of US as it looks at cheaper alternatives that have emerged due to the global supply glut.

bought 2 million barrels of light sweet in a tender today, official sources said.

The oil is for delivery at its in during April 11-20.

IOC's had in October last year received India's first ever shipment of US when it imported a 1.6 million barrels parcel.

Prior to today's buying, had placed a cumulative order of 3.9 million barrel of US crude.

Sources said had previously imported blend of two grades of crude oil but in today's tender it has bought the entire 2 million barrels of single

State-owned Corp Ltd (BPCL) and Hindustan Corp Ltd (HPCL) had also placed orders for about 2.95 million barrels and 1 million barrels of US crude respectively for their Kochi and Visakhapatnam refineries.

The October cargo was the first shipments to since the US stopped in 1975.

IOC's first purchase of US crude comprised 1.6 million barrels of high sulphur crude Mars and 400,000 barrels of Western Canadian Select oil. In the second, it bought 1.9 million barrels of US crude, half of it being

The second shipment was for the

India, the world's third-largest oil importer, joins Asian countries like South Korea, and to buy US crude after production cuts by OPEC drove up prices of heavy-sour crude, or grades with a high sulphur content.

Buying US crude has become attractive for Indian refiners after the differential between Brent (the benchmark crude or marker crude that serves as a reference price for buyers in the western world) and (which serves as a benchmark for countries in the east) has narrowed.

Even after including the shipping cost, buying US crude is cost competitive for Indian refiners, sources said.

started buying US crude within weeks of Prime Minister Narendra Modi's June 2017 visit to the US when talked of his country looking to export more to

To encourage US crude purchases, the government has allowed refiners to use a foreign rather than an Indian-owned vessel for the purchase. Indian refiners typically have to use domestic vessels for their crude imports.

Sources said IOC has bought the third cargo on DES or Delivered Ex Ship basis.

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

First Published: Thu, January 11 2018. 20:40 IST