India-US : Energy Relations


  • India received first ever shipment of US crude oil purchased by state-run Indian Oil Corporation (IOC).
  • IOC will process crude at its refineries located at Paradip, Haldia (in West Bengal), Barauni (in Bihar) and Bongaigaon (in Assam).
  • This was one of first shipments to India since United States stopped oil exports in 1975.  
  • With this India, the world’s third-largest oil importer joins other Asian countries like South Korea, Japan, Thailand,  China and Taiwan to buy US crude oil as they seek to diversify oil imports from other regions after the OPEC production cuts raised prices of Middle East heavy-sour crude ( grades with a high sulphur content).
  • India for first time has started process of importing Liquid Natural Gas (LNG) from United States.



  • The delivery of shipment follows recent commitments to US oil purchases by Indian state refiners.
  • Indian companies, both public and private, have invested about $5 billion in US shale assets.
  • They have also contracted 5.8 million tonnes per annum of liquefied natural gas (LNG) from US and the first shipment is expected to be delivered to India in January 2018.
  • The IOC purchase comes after Prime Minister Narendra Modi’s visit to the US in June 2017 when President Donald Trump had assured that US looks forward to export more energy products to India.
  • They had committed to expand and elevate bilateral energy cooperation through strategic energy partnership.
  • Under this partnership, both countries are elevating cooperation in field of energy, including in cleaner fossil fuels, renewables, nuclear, and cutting edge storage and energy efficiency technologies.
  • The first delivery of oil imports is considered as significant milestone in growing partnership between the US and India.
  • US crude oil shipments to India have potential to boost bilateral trade between both countries by up to $2 billion.



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