India Plans to Import More Oil from U.S. and Less from the Middle East

Oil refineries in India are set to cut imports from Saudi Arabia by about 25% after OPEC ignores pleas from New Delhi for them to increase global supply.

Following these cuts, the United States has now become the second largest supplier of oil for India behind Iraq. Saudi Arabia has slipped to number 4, previously holding one of the top two slots.

The decision to shift its energy imports came after government officials out of New Delhi called for OPEC to lift their production cuts, which they decided to maintain until April. Saudi energy minister Prince Abdulaziz bin Salman suggested India dip into “strategic reserves” filled with cheaper oil  bought in 2020.

Rising prices in oil have fueled much of India’s decision, a country that imports up to 80% of its gas and oil-related energy needs. On average, state refineries imported anywhere between 14.7 and 14.8 million barrels of oil from Saudi Arabia ahead of this news.

Oil prices across the globe have been on the rise, driven by OPEC’s production cuts as well as supply chain failures in early February caused by winter storms in America’s southwest region. Currently, CFD’s on crude oil (WTI) are trading at $64.08, while a barrel of crude oil on the New York Mercantile Exchange costs $64.70 at the time of writing. 

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