The first shipment of crude oil from the US will be arriving in India -- the world's third-largest oil importer -- on Monday, October 2. The capacity of this shipment will be around two million barrels, according to the official who declined to be named.
The official said although the Middle East will always be the preferred destination for India for its energy needs because of lesser distance and shipping costs, the US had huge potential in terms of technology innovations.
"The energy markets are going to be transformed pretty radically in the next five-to-10 years or so. Oil and gas will continue to play a role. To the extent that it is economically viable, the US will play a role. But it is not going to be major," the official told reporters at an informal interaction.
Talking about the upcoming first shipment, he said: "Indian Oil, Bharat Petroleum have committed to buy multiple shipments. In case of Indian Oil, they will get around eight shipments through next March."
"What the industry folks have told me is that it's all a matter of cost and so long as the price differential to buy crude is in the range of $2 a barrel, it is fine for them," he added.
The official pointed out that the US entering into the global markets as an exporter will bring down the cost for consumers across the globe.
"With India (coming on board), we hope it helps in terms of energy access and energy security. So, that is an opportunity for India to diversify its sources of crude both geographically and who they are buying from."
He further said: "The ports in the US are not built for exporting because for the last several decades the US has been a net importer of oil. There are construction efforts going on to expand the ports, to allow very large crude containers... and we believe that will eventually bring down the shipping cost to about 50 cents per barrel, which will further bring down the cost for the US to markets like India."
(This story has not been edited by Social News XYZ staff and is auto-generated from a syndicated feed.)
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