India's state-owned Bharat Petroleum is reportedly buying up rising volumes of US oil as demand in the country continues to accelerate and low US oil prices make purchases attractive.
The main reason for this sharp demand growth is the recent removal of restrictions in the country. In fact, this July, fuel demand grew to its highest level since April.
Asian consumers see US oil as more attractive because OPEC and its allies are currently limiting production.
So far, Bharat Petroleum has purchased approximately 9 million barrels of US crude for deliveries in August, September and October.
This is more than half of the 17 million barrels purchased by the company between January and July. Other Asian countries, including China and South Korea, also boosted their purchases this month.
India mainly buys WTI Midland, a light oil produced in the upper shale region of the United States. But it also bought West Texas Light (WTL) because of attractive prices.
Another state-owned refinery, Indian Oil, is looking for cheap oil, but is currently targeting the West African market.
Earlier this year, state-owned refiners cut purchases from Saudi Arabia because relations between New Delhi and Riyadh soured on rising oil prices. But they resumed regular purchases in June since Saudi Arabia and other countries in the Middle East were supplying liquid medical oxygen and providing medical care to India.
In recent weeks, exports of US oil dropped due to volatile fuel demand around the world. The Energy Information Administration (EIA) reported that the average four-week volume fell to 2.4 million barrels per day, which is the lowest since February 2019. Nevertheless, analysts expect a continued rise in the coming months.
