By Bizodisha Bureau, Bhubaneswar, October 2, 2017: The first shipment of US crude oil to India on Monday arrived at Paradip Port ending more four decades of embargo on oil exports from USA.

This first shipment to India, since the United States stopped oil exports in 1975, is part of the two million barrels contracted by India to keep oil prices low and stable for the benefit of consumers.

Indian Oil Corporation (IOC) and Bharat Petroleum (BPCL) have placed orders for over two million barrels from the US. US crude oil shipments to India have the potential to boost bilateral trade by up to $2 billion.

The shipment at Paradip was met by US Consul General to Hyderabad, Katherine Hadda; Joint Secretary for International Cooperation from the Ministry for Petroleum and Natural Gas, Sunjay Sudhir; and Joint Secretary, Americas Division, from the Ministry of External Affairs, Munu Mahawar, said a US Embassy press release.

MaryKay Carlson, Chargé d’Affaires at the US Embassy in New Delhi said “This event marks a significant milestone in the growing partnership between the United States and India. The US and India are elevating our cooperation in the field of energy, including plans for cleaner fossil fuels, renewables, nuclear, and cutting edge storage and energy efficiency technologies. We look forward to working together on further sales of US crude and exploring opportunities to expand the role of natural gas in India.”

During their June 26 meeting in Washington, President Donald Trump and Prime Minister Narendra Modi committed to expanding and elevating bilateral energy cooperation through a Strategic Energy Partnership. The leaders called for a rational approach that balances environment and climate policy, global economic development, and energy security needs.

India is the third largest consumer of energy in the world following the US and China, and the 3rd largest importer of crude and the 4th largest importer of LNG. With over 1.2 billion population, energy will be a key driver of the growth process in India.

In terms of energy, India today consumes less than 5% of the world energy. However, this is going to accelerate and India is set to reach about 9% by 2035. Over the next 20 years, India’s energy consumption will grow the fastest among all major economies. By 2035, China and India will have the largest share of global demand (35%) overtaking even OECD (33%) and all other combined at 32%. Indian population will contribute an increase in consumption of around 300 million barrels per day per year for next few years. That is almost 30% of global incremental growth.

India has also developed itself into a refining hub with complex refineries that are exporting products to the world. These are state-of-art refineries, which can take a range of crude as input and give a range of output product, given the very high level of complexity.