(IndianOil), said it has received its first U.S. crude oil cargo of 1.6 million barrels. Both the companies have together placed an order for more than two million barrels of crude oil from the United States and this purchase agreement is estimated to increase the bilateral trade between the countries by a whopping $2 billion.
A function was held at the port to mark the arrival in which a sample of the crude oil was symbolically presented to Joint Secretary (International Cooperation) in the Ministry of Petroleum and Natural Gas Sunjay Sudhir by Director (Pipelines), IOCL Anish Aggarwal.
"I hope that the new arrangement will also usher in price stability and energy security for India, which is witnessing robust growth in demand for petroleum products", added Mr.Sudhir. The crude oil shipment was delivered by MT New Prosperity, a Very Large Crude Carrier (VLCC) of capacity 2 million barrels of crude, which left the U.S. Gulf Coast on August 19.
The US had banned its oil exports in 1975 after a spike in oil prices driven by the Organisation of the Petroleum Exporting Countries (OPEC).
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This new development is expected to boost the bilateral oil trade to $2 billion. The consignment, ordered by Indian Oil Corp (IOC), will process the crude at IOC's East-Coast base refineries, located at Paradip, Haldia, Barauni and Bongaigaon.
The total volume of the crude presently contracted by Indian public sector refineries is 7.85 million barrels. The three refiners are sourcing sweet, sour and heavy crudes for their refineries which are equipped to handle a complex mix of crude oils. Indian companies, both public and private, have made sizeable investments in U.S. shale assets with a total investment of approximate $5 billion.
During his visit to Washington DC for the first meeting with American President Donald Trump in June, Prime Minister Narendra Modi had mentioned that India was looking to strengthen its hydrocarbon engagement with the United States. The first shipment of LNG is expected to reach India next January.
"President Trump affirmed that the United States continues to remove barriers to energy development and investment in the United States and to US energy exports so that more natural gas, clean coal, and renewable resources and technologies are available to fuel India's economic growth and inclusive development", it added. The US and India are the world's largest and third largest consumers of energy respectively.
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