IOC first Indian refiner to sign crude oil supply deal with US

To ensure a steady inflow of crude oil at a time imports from Iran are falling, state-run Indian Oil Corp (IOC) has become the first domestic company to sign a long-term supply contract with the US.

The oil marketing company, in a statement released on Monday, said the annual deal is worth $1.5 billion and will be effective for FY20. “IOC has finalised a term contract for import of up to 3 million tonne of crude oil of US origin grades as a part of its strategy to diversify term crude sources,” the company said, adding the contract was finalised on February 15.

FE in January reported IOC was looking at long-term contracts with US suppliers, and that negotiations were on while non-availability of official selling price (OSP) was proving to be a hurdle. Till now, Indian refiners have been buying US crude oil in spot markets since 2017.

FE had reported that Bharat Petroleum Corporation (BPCL) and Hindustan Petroleum Corporation (HPCL) might also sign long-term contracts with the US since IOC was the negotiator and the terms were likely to be finalised for all three national oil marketing companies.