Indian Oil Corp, the nation’s largest oil refiner, on Monday said it has signed its first annual deal to buy up to 3 million tonnes, or 600,000 barrels a day, of US oil. The company previously bought US oil only from the commodity market. India has been forced to reduce its import of Iranian oil due the US sanctions, even as the recent the political crisis in Venezuela — another source of oil — has muddied the water. Oil producers’ cartel OPEC too is keen to reduce output to bring down the price.
India and China, two large importers of crude oil, had discussed ways to come together and buy US oil last year, as per a Bloomberg report. The report said India, China, South Korea and later Japan will form a buyers’ alliance to gain an edge in negotiating power. Since discovering shale oil — oil that is trapped in earth within layers of shale rock and extracted through fracking — the US oil industry has boomed, and recently became the largest oil producer in the world. In fact, the state of Texas now produces as much oil as Iran and Iraq. Read more