International reports published earlier this week indicate that India can be expected to look increasingly to diversified sources, not least Guyana, to secure its oil imports, as the country seeks to attach a high priority to further diversifying its energy sourcing basket in an effort to avoid becoming hostage to international pricing and supply shocks.
Earlier this week, the international energy media source, Energy News Network, reported that the US and the Caribbean are emerging as “new hotspots” for crude oil imports by India which last year, ranked third behind China and the United States as the world’s leading oil importers.
The Caribbean, in this instance, means overwhelmingly, Guyana, whose huge oil discoveries since 2015 and accelerated crude recovery has meant that earlier this year India has been able to twice secure million-barrel oil purchases from Guyana.
Oil industry watchers expect to see further oil supply contracts signed between the Government of Guyana and India’s largest public sector oil refiner, Indian Oil, in the period ahead. India has been moving to effect strategic adjustments to its oil importation regime since last year when Organization of Petroleum Exporting Countries (OPEC) moved to effect production cuts around May 2020 in order to ensure uncontrolled slippage in oil prices.
This week, India’s Petroleum Minister, Hardeep Singh Puri, was quoted as saying that the move by India had been taken to ensure security of its crude oil supplies and to mitigate the risk of crude oil imports from a single source. Guyana, now regarded as the ‘go to’ country for crude oil supplies in the hemisphere could play an important role in helping to ensure the security of India’s oil supplies from non-OPEC sources given the long-standing relations between the two countries. The level of countries’ crude oil consumption is one of the key barometers used to measure the extent of its clout as an industrial, and last year, only China, which imported US$176.3 billion worth of crude oil and the United States, whose oil imports in 2020 were valued at US$81.6 billion, exceeded India’s US$64.6 billion in oil imports. South Korea, Japan and Germany are also among the heavy hitters in terms of oil imports.
