Saudi Arabia has been pushed to the fourth spot by the United States in the race of oil supply to India. Ehsan Ul Haq, Refinitiv Analyst said, “U.S. demand was weak and refineries were running at low rates so the U.S. crude had to go somewhere, and Asia is the region which has seen rapid demand recovery”.
A surge in India’s Oil Import From U.S.
A major report stated that in February from the prior month, India’s oil imports from the U.S. surged 48% to a record 545,300 BPD which accounts for 14% of India’s overall imports last month. The U.S. emerged as the fourth-biggest supplier to India after the U.S. Ehsan Ul Haq said, “Crude from America was cheap compared to other producing regions in November”. India is the world’s third-biggest oil importer and consumer which has repeatedly called on OPEC+ to ease the supply curbs.
Effect of US-China Trade Deal on Oil Imports
Chinese oil demand represents over 12% of the total world demand. Under the trade deal with the U.S, China has found it much ‘challenging’ to meet the oil and gas import commitments. The Refinitiv Analyst said, “China has not been taking U.S. oil because of the trade problem, so India is the obvious choice”. An economic slowdown in China has sent shockwaves through the rest of Asia, which has weakened the oil demand across the region.
TPT Policy Advocacy & Recommendations
- To reduce the trade imbalance with the U.S, China must buy large volumes of U.S. crude, which will increase the dollar value of Chinese imports in ways that other U.S. energy products cannot do.
- As an export marketer for its manufacturing, China needs continued access to the U.S. But to keep this economic lifeline open, Beijing must make sure that it is good on its pledge under the trade deal signed with the U.S.