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India's Reliance makes first purchase of US crude

NEW DELHI/SINGAPORE (Reuters) — India’s Reliance Industries Ltd has purchased crude oil cargoes from the United States for the first time, drawn by the lower price for US oil versus global benchmarks, three trade sources said on Tuesday.

Photo courtesy of Reliance Industries Ltd.
Photo courtesy of Reliance Industries Ltd.

Reliance, the owner of the world’s biggest refining complex at Jamnagar, is joining state-run refiners Indian Oil Corp, Bharat Petroleum Corp and Hindustan Petroleum Corp in importing US crude. The purchase illustrates the vast reach of US oil exports since the government rescinded a decades-long ban at the end of 2015.

For this purchase, Reliance bought 1 MMbbl of West Texas Intermediate (WTI) Midland and a similar-sized cargo of Eagle Ford crude, both of which are expected to arrive in November, the sources said.

US producer Occidental Petroleum Corp sold the WTI Midland cargo, they said.

Reliance did not respond to Reuters’ email seeking comments.

There was also no reply to an emailed request for comment from Occidental sent outside of US business hours.

Opportunities for Indian refiners to import more US crude increased after the discount for West Texas Intermediate, the benchmark for US crude, to global benchmark Brent stretched to its widest since 2015 during September.

State-run Indian refiners have bought a total 7.85 MMbbl of oil from the United States so far.

India’s imports of US oil follows Indian Prime Minister Narendra Modi’s visit to Washington in June when President Donald Trump said his country looked forward to exporting more energy products to India.

On Monday, Indian Oil, the country’s top refiner, received its parcel of the US crude at the eastern port of Paradip, the company said in a statement.

Including the US as a source for crude imports for refiners will go a long way in mitigating the risk arising from geo-political disruptions, Sanjay Sudhir, the joint secretary for international cooperation at the oil ministry, said in the Indian Oil statement.

US crude oil shipments to India have the potential to boost bilateral trade by up to $2 B, the US embassy in India said in a statement on Monday.

Reporting by Nidhi Verma in NEW DELHI, Florence Tan and Jessica Jaganathan in SINGAPORE; Editing by Christian Schmollinger

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