Due to low-cost US crude prices compared to crude from Saudi Arabia, India has increased its oil imports from the United States. Thus, making the United States India’s second biggest oil supplier last month, overtaking Saudi Arabia.
According to Reuters, India made the switch in supplies, due to lower US crude demand on one hand and Saudi Arabia's voluntary extra 1 million barrels per day (bpd) output cut on the other hand. The Organization of the Petroleum Exporting Countries and its allies (OPEC+) in their last meeting decided to maintain lower production.
In February, India's imports from the United States rose 48 per cent to a record 5,45,300 barrels per day (bpd) compared to January, accounting for 14 per cent of India's overall imports last month.
Iraq continued to be the top oil supplier to India. This is despite a 23 per cent decline in purchases to a five-month low of 8,67,500 bpd, the data showed. Like Saudi Arabia, Iraq had also cut down production. Iraq has reduced annual supplies of oil to several Indian refiners by up to 20 per cent for 2021. This is because OPEC's second-largest producer tries to meet its obligations under the group's production deal.
"China has not been taking US oil because of trade problems so India is the obvious choice," he said. India, the world's third biggest oil importer and consumer, had repeatedly called on major oil producers to ease supply curbs to aid global economic recovery and had pointed to Saudi Arabia's voluntary cuts for contributing to a spike in global oil price.