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India, the world’s third-largest oil importer, has sealed a first deal to import crude oil from the US and the shipment is expected to touch Indian shores in October. The deal, by state-owned Indian Oil Corp (IOC), comes within weeks of Prime Minister Narendra Modi’s visit to the US when President Donald Trump talked of his country looking to export more energy products to India. “We have bought 2 million barrels of crude oil from North America comprising 1.6 million barrels of US Mars crude and 400,000 barrels of Western Canadian Select,” IOC Director (Finance) A K Sharma. US Mars is a heavy, high-sulphur grade which will be processed at IOC’s newest refinery at Paradip in Odisha.

Port-wise import of base oil into India

"Given the current international oil markets where the differential between Brent (the benchmark crude or marker crude that serves as a reference price for buyers in western world) and Dubai (which serves as a benchmark for countries in the east) has narrowed. “Even after including the shipping cost, buying US crude proved to be very cost competitive to us.” he said. Sharma said the company will buy more crude from the US if the market conditions remain favorable for such purchases.

Origin-wise import of base oil into India

Indian state-run refiner Bharat Petroleum Corp Ltd has also bought 1 million barrels of sour crude from the US for its 190,000 b/d Kochi refinery.

Base Oil Group I & Group II CFR India prices
MonthGroup I - SN 500 Iran OriginJ-150 Singapore OriginN- 70 South Korea OriginBright Stock-150
January 2017 570 – 585 585 - 600 560 - 565 975 - 985
February 2017 620 – 630 630 - 640 610 - 625 1000 - 1030
March 2017 640 – 650 650 - 660 630 - 645 1020 - 1050
April 2017 645 – 655 655 - 665 635 - 650 1025 - 1055
May 2017 710 – 715 685 - 695 655 - 665 1065 - 1085
June 2017 700 – 705 675 - 685 645 - 655 1055 - 1075
July 2017 715 – 720 690 - 700 660 - 670 1070 - 1090
Price movement since January 2017 Prices have gone up by USD 140 PMT (24%) in July 2017. Prices have firmed up by USD 100 PMT (17%) in July 2017. Prices have shoot up by USD 100 PMT (18%) in July 2017. Prices have hike up by USD 100 PMT (10%) in July 2017

About the Author

Dhiren Shah

Dhiren Shah is a Chemical Engineer and Editor-in-Chief of Petrosil Group, who started his career with a reputed transformer oil manufacturing company in India as Sales Engineer and enhanced his knowledge by undergoing a business management course at the Indian Merchants Chamber. He later ventured and specialized in imports and logistics of petroleum products for 10 years and in 2002 became part of the Petrosil Group. He is instrumental in developing the various Petrosil brands. He loves to read and travel and is also an avid internet surfer. Contact Dhiren at dhiren@petrosil.com

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