Iran has displaced Nigeria as India’s third largest supplier of crude oil after India, the world’s third-largest oil importer, shifted its focus to the Middle East and the United States for supply.
In August, India’s Hindustan Petroleum Corporation said it would take its first crude oil import from the US, dumping Nigeria’s sweet crude for US oil.
Rising production output from the US makes West Texas Intermediate (WTI) cheaper than Brent crude whose price was boosted by an agreement between members and non-members of the Organisation of Petroleum Exporting Countries (OPEC) to cut back supply to the global market.
As at 3:30pm on Friday, Brent crude was trading at $61. 82 while WTI was trading at $55.88.
“In the last few months, US oil gave tough competition to the African grades and the price difference (between WTI and Brent) was good enough to cover the freight,” R. Ramachandran, head of refineries at Bharat Petroleum Corp, told Reuters.
A ship-tracking data compiled by Reuters shows that US oil accounted for three percent of India’s overall imports while crude from Africa accounted for 10.5 percent, the lowest since November 2012.
Between 2015 and 2016, Nigeria’s sweet crude accounted for 12 percent of India’s imports with the country getting nearly 23.7 MMT of crude and over 2 MMTPA of LNG from Nigeria.
According to Reuters, India imported 4.1 million bpd of crude oil in October, a 15 percent decline from September, while 430,000 bpd were from Africa, the lowest level since March 2013.