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US becomes India’s 2nd Biggest Oil Supplier overtaking Saudi Arabia; Iraq Tops

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According to trade data released by Reuters, the United States surpassed Saudi Arabia as India’s 2nd Biggest Oil Supply in February, 2021.  Iraq continues to be India’s Largest supplier despite a 23% decline in purchases to a five-month low of 867, 500 BPD (Barrels Per Day).

  • India’s imports from America increased to 48% to a record 545, 300 BPD in February, 2021 accounting for 14% of India’s overall imports last month
  • Saudi Arabia slipped to No.4 Position for the 1st time since January 2006. Nigeria rose to 3rd Position and UAE slipped to 5th Position.
  • Totally, India shipped 3.92 million BPD of Oil in February, 2021 (decline of 18% from January).

Fact

India is World’s Third Largest Oil Importer & Consumer (after USA, China)

Position

Country

1 Iraq
2 USA
3 Nigeria
4 Saudi Arabia
5 UAE

Reasons for rise of US

  • The Crude oil supplied by US is relatively cheaper compared to oil supplied by OPEC (Organization of the Petroleum Exporting Countries +) and its allies
  • OPEC has cut its oil productions in order to speed up oil market’s recovery from COVID-19 Pandemic. Saudi Arabia has opted for a voluntary extra 1 Million BPD output cut due to OPEC’s decision.

Key Points

  • At present, India ships 84% of its crude needs and relies heavily on the Middle East.
  • Middle East’s share of India’s overall imports declined to a 22-month low of about 52.7% while Africa’s rose to 15%.
  • India is actively taking steps to diversify its crude oil sources.

Recent Related News:

i.On May 11, 2020, The ministry of petroleum and natural gas has set up a 6-member panel to review the existing Production Sharing Contracts (PSCs) due to the fall in crude oil prices and the COVID-19 lockdown.

About Reuters:

Reuters is an International News Organization owned by Thomson Reuters
President – Michael Friedenberg
Headquarters – London, United Kingdom

About Organization of the Petroleum Exporting Countries (OPEC):

13 Member Countries – Algeria, Angola, Congo, Equatorial Guinea, Gabon, Iran, Iraq, Kuwait, Libya, Nigeria, Saudi Arabia, UAE & Venezuela.
Secretary General – HE Mohammad Sanusi Barkindo
Headquarters – Vienna, Austria