India’s quest to broad-base its energy security received a major boost after the first shipment of 1.6 million barrels of crude oil arrived at Paradip port in Orissa on October 2, following US President Donald Trump and Indian Prime Minister Narendra Modi’s agreement on a strategic energy partnership in June this year. The shipment is part of a cumulative order of 3.9 million barrel placed by the Indian public sector refiner Indian Oil.
Crude oil exports from the US were banned for nearly four decades, starting from the 1973 OPEC (Organization for Petroleum Exporting Countries) oil embargo to late 2015 when the then President Barack Obama signed the Consolidated Appropriations Act. Since 2017, crude oil exports have surpassed more than one million barrels per day (BPD) on multiple occasions.
Mr. Sanjay Sudhir, joint secretary (International Cooperation) in the Ministry of Petroleum and Natural Gas, hailed the shipment as a “new chapter in the history of Indo-US trade” that will be able to guide price stability and energy security in India. He was present along with Ms. Katherine B Hadda, US Consul General in Hyderabad, and other officials from the Ministry of External Affairs and Indian Oil at the ceremony to welcome the cargo. “MT New Prosperity, a Very Large Crude Carrier (VLCC), of capacity 2 million barrels of crude, left US Gulf Coast on 19th August and arrived at Paradip port today. Indian Oil will process the crude at its East-Coast base refineries, located at Paradip, Haldia, Barauni and Bongaigaon,” the press release said.
Bharat Petroleum and Hindustan Petroleum have also placed orders for 2.95 million barrels and 1 million barrels respectively for their Kochi and Vizag refineries.
As the world’s third largest consumer of energy, India is engaged in finding new avenues for enhancing its energy security and exploring alternative sources of energy. A significant aspect of India-US ties is their hydrocarbon engagement and the sourcing of crude oil from the US is likely to raise bilateral trade to up to $2 billion. “The US and India are elevating cooperation in the field of energy, including plans for cleaner fossil fuels, renewables, nuclear, and cutting-edge storage and energy efficiency technologies,” said MaryKay Carlson, Chargé d’Affaires at the US embassy in New Delhi. With a total investment of about $5 billion by Indian companies in US shale gas assets, the first shipment of LNG is expected to arrive in India by January next year.
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