- India May Dump Nigeria’s Crude for US Oil
India’s Hindustan Petroleum Corporation plans to buy low-sulphur oil and is considering taking the United States oil in place of Nigeria’s sweet crude.
The US stopped the purchase of Nigerian crude about three years ago, a development that made Nigeria to turn to Asia, partularly India and China for the sale of the commodity.
Reuters reported that the state-owned corporation said it planned to buy low-sulphur oil from the United States in the next few months for its 166,000 barrel per day Vizag refinery in southern India.
“We are also going to buy in the near future, in some months. There are certain grades, which we found suitable for us,” the Chairman, M.K. Surana, was quoted to have said at a news conference.
“We should have a wider basket and more options. The US crude is an additional option for us.”
India is the latest Asian country to buy the US crude, following South Korea, Japan, China, Thailand, Australia and Taiwan, after OPEC cuts drove up prices of Middle East heavy-sour crude, or grades with a high sulphur content.
Should India shift its bulk oil purchase from Nigeria to the US, the zero oil revenue days that was predicted by Acting President Yemi Osinbajo late last month as being around the corner, might be approaching faster than envisaged.
Osinbajo had told operators in Nigeria and other oil producing countries that zero oil revenue days were fast approaching, stressing that it was time to start looking for other sustainable means of generating revenue.
“Almost every major oil importing country today has embarked on an aggressive non-fossil fuel alternative programme. China, Japan and some Scandinavian states have already set dates within the next 10 to 15 years to produce and use only electric vehicles. The zero oil days are clearly around the corner,” Osinbajo had said.
Reuters reported that Indian refiners stepped up purchases of the US oil after Prime Minister Narendra Modi’s visit to the Washington in June when President Donald Trump said the United States looked forward to exporting more energy products to the world’s third-biggest oil buyer.
Since then, state-run Indian Oil Corp and Bharat Petroleum Corp have bought the US oil, as Indian refiners seek to diversify their crude import sources as arbitrage opens due to global oil supply cuts.
The HPCL’s Finance Chief, J. Ramaswamy, said the company was evaluating if Nigerian sweet oil could be replaced with the US oil.
He added that HPCL had the appetite to import a very large crude carrier containing two million barrels of the US oil every month.
HPCL reported a 56 per cent drop in net profit for the fiscal first quarter on Friday, as inventory losses dragged down its refining margins.