New Delhi: The US may offer oil and gas to India on concessional terms from its own reserves to help the latter tide over any shortages arising from the drone attacks on Saudi Arabian Oil Company, or Aramco, that have caused the biggest-ever disruption in global crude oil supplies.
Diplomatic sources said that supply details would be discussed in detail during the visit of the official Indian delegation to the US starting September 21, where Prime Minister Narendra Modi is also scheduled to meet US President Donald Trump. The delegation also includes a large number of Indian business honchos, including chiefs of public and private sector oil companies.
“We can expect Indian oil companies to sign memoranda of understanding with their US counterparts for increasing oil imports to meet the country’s domestic demand. Saudi Arabia meets close to 20 per cent of oil needs of the country and if there is a supply disruption, the US can become a dependable ally if terms of such supplies are favourable,” a source said.
India has also sounded Russia for increasing their oil supplies. Rosneft PJSC has agreed to assist India with its energy security efforts against the backdrop of the drone attacks on the Saudi oil facilities. Rosneft Chairman Igor Sechin conveyed this during his meeting with Petroleum Minister Dharmendra Pradhan Tuesday.
The talks with US on oil supplies hinges on the terms of exports. The sources said that the US could offer concessions oil exports on par with the terms India enjoyed with Iran. The Islamic Republic offered cheaper freight and a 60-day credit period to Indian importers such Indian Oil Corporation, Mangalore Refinery and Petrochemicals (MRPL) and Nayara Energy (formerly Essar Oil).
“The offer has been indicated and this needs to be worked out in detail when the delegation level visit happens later this month. Transportation cost is an issue to bring oil from the US,” the diplomatic source quoted earlier said.
Though Indian oil companies have started importing oil from the US for the past couple of years, the quantity remains miniscule and forms just about 1 per cent of country’s total oil imports. But this quantity can grow with the US shale oil market becoming relevant again at current crude levels and an increase in total rig count in the world’s largest oil guzzling nation.
The emergence of the US as a major oil supplying nation indicates that it could be the biggest gainer in any disruption in global oil production.
