US Becomes Second Biggest Oil Supplier of India

Highlights:

  • The United States has surpassed Saudi Arabia to become India's second largest oil supplier.
  • This shift came after refineries increased their purchases of cheaper U.S. crude oil to record levels to offset OPEC+ production cuts. 
  • The shift in supply was triggered by lower crude oil demand in the United States.
  • It coincided that Saudi Arabia voluntarily cut its output by 1 million barrels per day in accordance with an agreement between the Organization of Petroleum Exporting Countries and its allies (OPEC+) to maintain a low output.
  • India’s oil imports from the United States, the world’s largest oil producer, increased to 48%, reaching a record 545,300 barrels per day (barrels/day) in February 2021, accounting for 14% of India’s total imports in February. 
  • On the other hand, since January 2021, India’s imports from Saudi Arabia have decreased by 42%, falling to a 10-year low of 445,200 barrels per day.
  • As a result, Saudi Arabia, which has always been one of India’s two largest oil suppliers, fell to fourth place for the first time since 2006. 
  • India is the world's third largest oil importer and consumer.
  • The country has repeatedly called on major oil producers to ease supply constraints and help the global economy recover.
  • India also pointed to Saudi Arabia's voluntary cuts to promote the rise of global oil prices. 
  • According to data, Iraq is still India's largest oil seller.
  • Even though oil purchases fell by 23% from a five-month low to 867,500 bpd, they maintained their highest position.
  • Iraq has also cut its annual oil supply to Indian refineries by 20% in 2021 to fulfill its obligations under the OPEC production agreement.