NEW DELHI: India's energy trade with the US is expected to rise by more than 42% to $10 billion in the current financial year as the world’s third-largest oil consumer expands non-Opec energy sources to de-risk oil supplies from the instability of West Asian geopolitics.
“In 2018-19, (India’s) total import of crude oil, LNG (
liquefied natural gas
) and coking coal stood at $7.2 billion. In the current fiscal, this may go up to $10 billion... mounting geopolitical uncertainties, rising US production and India's appetite for energy has created both the need and opportunity for the two countries to lift bilateral energy ties to a new level,” oil minister
Dharmendra Pradhan said at the US-India Strategic Partnership Forum's annual leadership summit.
The US had signed a strategic energy partnership agreement with India in 2016 envisaging supporting each other’s energy sectors and securing a major market for its LNG. Strengthening of energy ties with the US is part of New Delhi’s gameplan to reduce its overwhelming dependence on West Asian members of the Opec grouping, which account for 65% of oil imported by India.
The oil market tremors from attack at the heart of
Saudi Arabia’s oil industry in September, which knocked off half the Opec lynchpin’s production capacity and prompted a historic spike in oil prices, underpins the timeliness of India’s strategy as the country meets 82% its oil needs through imports.
It was state-run gas utility GAIL that effectively opened the US energy route for India in 2013, much before any entity looked at America as a source of energy, by signing 20-year contract for importing shale gas in ships. Today, the company has contracts for a total 5.8 million tonne of liquefied natural gas from the US. The first shipment under that deal hit the Indian shore in 2017.
Four years later, IndianOil established the viability of US oil for India by bringing a shipment from the spot market as Washington began hardening its stand against Iran — then among India’s top three oil suppliers.
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