Following the globe oil price dip there are several turnovers in different countries and the manner in which they are going about in their oil trading business. Indian oil and gas sector too has a massive importing capacity and its traditional importing markets include nations like Iran and Saudi Arabia, but going through the pricing fluctuations an emerging economy like India is also forced to rethink its fuel and energy policies. India recently has increased oil trading with Venezuela, Mexico and Iraq thus decreasing the quantities purchased from the old usual depots of Saudi Arabia and Iran.
Accessibility of affordable crude variants along with drop in the shipping expenses has encouraged India to swap the oil trading countries this in turn has helped the oil trading sector of the nation to achieve a more diversified profile in terms of the globe markets. As a result, imports from Iran has been cut short and reached the lowest range in February during the last 18 months.
Though the transportation cost of importing oil from Mexico and Venezuela is much more than Saudi Arabia; the cheap per barrel rate which is available in these countries make it a preferable option. This change of buying cheap heavy crude in large quantities is helping the economy in two ways
1) It is enabling the country to build an inventory which is of massive help always and
2) It is fulfilling the long-awaiting target of diversifying its energy sources.
OPEC import volumes won’t be affected-
Organization of the Petroleum Exporting Countries (OPEC) is the strongest source of oil supplies to the world. Though India has decreased the imports from Middle Eastern region, its import volumes from the OPEC won’t change as it has gone to other countries within the organization for the imports.
It has been a long awaited ambition for India to have a sensible mix of energy sources.
The country’s import volumes coming from Saudi Arabia by January had dropped to 3.90 million metric tonne which is an 8.85% dip. On the other side, there has been a steep increase in the imports from Iraq which totaled to 2.48 million metric tonne thereby giving a rise of a whopping 56%. Reliance Industries has reported a considerate increase in its imports from Latin America so much so that the company witnessed a record 30% annual hike from its January imports alone.