Why India Have Moved Towards Guyana For Oil Imports?
As the world’s third-largest crude importer, India has received its first crude oil shipment from outside of Middle East. Guyana of South America has sent its first shipment through the country’s oil company Trafigura, the financial analysis platform Refinitiv Eikon has confirmed to the media.
In the beginning of March, the OPEC consortium had snubbed Indian demand, asking the Centre to do with its earlier stock and not looking for them to provide from a fresh production lot. OPEC has been awaiting demand to go up before it can start to increase its production. Brent crude, the most widely used benchmark, had risen in end of February, nearly 1 percent to $ 67.44 a barrel after the Organization of the Petroleum Exporting Countries (OPEC) and its allies agreed not to increase supplies till April 2021.
India has been telling refineries to look for more viable alternatives to the Middle Eastern countries. The 1 million-barrel cargo of Guyana’s Liza light sweet crude is said to have set sail on March 2 on Marshall Islands-flagged tanker Sea Garnet bound for India’s Mundra port, where it is set to arrive around April 8.
Guyana began exporting crude in early 2020. Many countries have already started looking at more viable options than solely depending on the Middle East to meet its oil needs. Since then, Guyana has been supplying mainly to the United States, China, Panama and the Caribbean.
India imports 82% of its oil needs and aims to bring that down to 67% by 2022 by replacing it with local exploration, renewable energy and indigenous ethanol fuel. Venezuela has the largest oil reserves in the world. But US sanctions have always kept India off limits to meet its energy needs.
Though it produces much more than Saudi Arabia, the South American company has been always tied down. As an OPEC-founding member Venezuela had resorted to illegal selling since 2018 through myriad little-known companies including Hangzhou Energy and Ariastone Group Pty Ltd that have helped it sell its oil since. After China National Petroleum Corp and Rosneft Oil Co PJSC stopped doing business with Caracas, Maduro strengthened ties with Iran, another country isolated by U.S. sanctions.
But India has played safe and found more viable alternatives in Guyana for example.