India purchased US crude oil for the first time after the four-decade ban on exports of US oil was lifted. In August, Texas Governor Greg Abbott received papers of the shipment from Indian Ambassador to the United States Navtej Sarna for the first oil trade, which was worth $100 million.
India is the world’s third largest oil importer — behind China and the United States — as well as the largest contributor to incremental oil consumption in 2016 among major economies. With huge demand of oil consumption and low domestic production, India is expected to increase oil imports over the next 20 years. Senator Ted Cruz stated that Texas will export crude oil to India as a reliable and stable partner.
Indian Oil Corporation, India’s largest private enterprise, and Bharat Petroleum, a state-controlled oil company, have started ordering crude oil from the United States. Last month, these two oil companies have ordered over 6 million barrels of US crude oil. In June, Indian Prime Minister Modi and President Trump promoted a fair bilateral trade relationship to boost economic growth on both sides during Modi’s visit to the White House. Under the closer bilateral trade relationship, and low prices on American oil, Indian oil companies are warming to the prospect of importing US crude oil.
While this is the first crude oil import from Texas, India has made significant purchases of petroleum, chemical, and coal products from Texas previously. In 2016, Texas exported $2.1 billion in goods and services to India, ranking as the third largest exporting state to the country. As a top exporter to India and a leader in crude oil reserve and production in the United States, Texas is expecting a growing economic relationship with India.
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