When Saudi Arabia raised the price of crude shipments to Asia and the US on June 4, it unwittingly provided the spark for India's maiden drive towards the US for supplies and help it undercut Opec's sway over the world's third largest oil consumer.
The opportunity to change things came when PM Narendra Modi met Donald Trump in the White House on June 27. Modi said India had one of the world's fastest growing energy demands, in response to Trump's line about reviving American energy exports. Modi responded that India would consider if the price was right.
The price, as it has turned out, is more than just right even after the long shipping distance, as the first US ship sails with shale oil bound for Indian markets. Indian officials say that even after facto ring in the distance, US oil is working out to be cheaper than Middle East oil. India now wants to leverage its status as a major energy buyer to get a better price, but also more importantly , to make a political point to its suppliers.
Saudi Aramco raised July prices for its Arab Light crude by 60 cents per barrel for Asian and US buyers on rising demand but reduced prices of shipment for Europe to stave off competition from Russia.
India's largest state-run refiner-marketer IndianOil immediately put its bet on US Eagle Ford and Mars crudes, buying consignments from trading house Trafigura for $100 million.
The ship sailed from the US for the company's latest refinery at Paradip in oil minister Dharmendra Pradhan's home state, Odisha, where it will dock next month.
With the advent of US-origin crude into its oil mix, India is making three points -first, diversifying its sources of oil (India's top suppliers are Iraq and Saudi Arabia); second, compel them to offer better prices (IOC officials observed that soon after India had secured its first US buy, Iraq decided to lower its prices); most importantly, it would help reduce the trade surplus India holds with the US, a sore point for the Trump administration. Indian officials say this could become a longer term affair, giving India greater room for manoeuvre with other tougher partners like Iran.
The opportunity to change things came when PM Narendra Modi met Donald Trump in the White House on June 27. Modi said India had one of the world's fastest growing energy demands, in response to Trump's line about reviving American energy exports. Modi responded that India would consider if the price was right.
The price, as it has turned out, is more than just right even after the long shipping distance, as the first US ship sails with shale oil bound for Indian markets. Indian officials say that even after facto ring in the distance, US oil is working out to be cheaper than Middle East oil. India now wants to leverage its status as a major energy buyer to get a better price, but also more importantly , to make a political point to its suppliers.
Saudi Aramco raised July prices for its Arab Light crude by 60 cents per barrel for Asian and US buyers on rising demand but reduced prices of shipment for Europe to stave off competition from Russia.
India's largest state-run refiner-marketer IndianOil immediately put its bet on US Eagle Ford and Mars crudes, buying consignments from trading house Trafigura for $100 million.
The ship sailed from the US for the company's latest refinery at Paradip in oil minister Dharmendra Pradhan's home state, Odisha, where it will dock next month.
With the advent of US-origin crude into its oil mix, India is making three points -first, diversifying its sources of oil (India's top suppliers are Iraq and Saudi Arabia); second, compel them to offer better prices (IOC officials observed that soon after India had secured its first US buy, Iraq decided to lower its prices); most importantly, it would help reduce the trade surplus India holds with the US, a sore point for the Trump administration. Indian officials say this could become a longer term affair, giving India greater room for manoeuvre with other tougher partners like Iran.
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