Indian Oil Corporation has signed a 1.5 billion dollar deal to buy oil from the United States in an effort to reduce dependence on traditional suppliers.
“Indian Oil has finalised a term contract for import of up to 3 million tonnes of crude oil of US origin grades as a part of its strategy to diversify term crude sources,” the company said in a statement.
“This is the first term contract finalised by any Indian PSU oil company for import of US-origin crude oil grades,” it said on Monday, a day before the Crown Prince of Saudi Arabia begins his India visit.
The approximate value of the contract beginning April works out to 1.5 billion dollars. The contract was finalised on February 15, said Indian Oil.
Government-owned refiners have purchased US oil earlier in the spot market. Indian Oil’s annual purchase agreement signals a firm entry for the United States into India’s suppliers club.
The move can have repercussions for traditional suppliers such as Saudi Arabia, Kuwait and Iraq.