IOC signs $1.5 billion deal to buy U.S. crude

In the first-ever deal by an Indian company, Indian Oil Corporation (IOC) on Monday said it had signed an annual deal worth $1.5 billion to import 3 million tonnes of crude oil in the fiscal year beginning April 1.

This is the first time any Indian refiner has signed an annual contract, since the country in 2017 began importing crude oil from the U.S. “IOC has finalised a term contract for import of up to 3 million tonnes of crude oil of U.S. origin grades as a part of its strategy to diversify term crude sources,” the company said in a statement. The contract was finalised on February 15. The term contract follows IOC signing up to buy crude oil from the U.S. through a term-tender deal in August last year. It had, at that time, bought about 6 million barrels of U.S. crude oil under a single tender for delivery between November 2018 and January 2019.

“The approximate value of the contract works out to $1.5 billion,” the IOC statement said. “This is the first term contract finalised by any Indian PSU oil company for import of U.S. origin crude oil grades.”

Prior to this, IOC and other state-owned oil firms bought crude oil from the U.S. on a spot or current tender basis which comprised one shipload of oil.