Covid-19 pandemic is bringing India and the US closer than before with the two sides now looking to strengthen their strategic energy sector partnership.
A strategic energy dialogue is scheduled between the two sides this week with the agenda of more collaborations and identifying mutually beneficial investment proposals.
Sources said that under the enhanced energy sector partnership while India looking to more than double its oil imports from the US this year, it wants the US to call upon its energy industry leaders to collaborate with the Indian companies to facilitate and develop tie-ups in innovative initiatives.
The further strengthening of the Indian-US relations during the outbreak has created growth for further partnership and take the energy dialogue of the last into credible deals and cooperative ventures.
India is already expanding its oil import basket looking for a wider spectrum of global suppliers to de-risk operations. It had started importing oil from the US for last few years. But the quantity remains small.
India imported close to 10 million tonnes (Mt) of oil in FY20. This may be doubled in FY21 if official and company level negotiations yield positive results. India is looking at $3-4 per barrel discount on crude and a higher credit period of 60-90 days from the US that would bring the import cost of the US oil at par with the Iranian oil. India used to import a lot of oil from Iran before sanctions.
India’s shift to the US would not be sudden as gas transportation company GAIL, oil marketing firm Bharat Petroleum Corporation Ltd (BPCL) and country’s largest oil refiner Indian Oil Corporation have sealed deals for supplies of the US crude earlier as well. The shale oil price there has also become very competitive in comparison to the Middle East and Gulf crude.
During a session with the US-India Strategic Partnership Forum (USISPF) earlier this week, oil Minister Dharmendra Pradhan also emphasized the importance of the strategic energy partnership, stating that it will go a long way in advancing shared goals between the US and India, including universal energy access, strengthened energy security, and increased energy trade between the two countries.
He added, “Energy infrastructure is a key component in transforming India as a global manufacturing hub of the 21st century and achieving the goal of self-reliance. India is going to witness an investment of over US $118 billion across the oil and gas value chain in the next few years. I welcome US energy industry leaders to leverage these opportunities and also collaborate with Indian companies to facilitate and develop tie-ups in innovative initiatives.”