NEW DELHI: The US just became India’s latest oil supplier, with the first shipment of crude landing in the country. State-owned IndianOil Corporation ’s purchase of 1.6 million barrels arrived at Paradip, Odisha, on Monday, and was received by US and Indian officials.The US had stopped oil exports in 1975, a ban lifted by former US President Barack Obama in 2015. MT New Prosperity, a very large crude carrier (VLCC), with a capacity to haul 2 million barrels, had left the US Gulf Coast on August 19. “IOC will process the crude at its refineries at Paradip, Haldia (in West Bengal), Barauni (in Bihar) and Bongaigaon (in Assam),” an IOC statement said. State-owned Bharat Petroleum Corporation Ltd and Hindustan Petroleum Corporation Ltd have also placed orders for about 2.95 million barrels and 1 million barrels of US crude, respectively, for their Kochi and Vizag refineries. “The total volume of the crude contracted by Indian public sector refineries is, therefore, 7.85 million barrels,” the statement said.US officials estimate the present Indian oil buys could increase bilateral trade by almost $2 billion. The US embassy, in its own statement, said, “During their June 26 meeting in Washington, President Trump and Prime Minister Modi committed to expanding and elevating bilateral energy cooperation through a strategic energy partnership.”Indian companies, both public and private, have invested about $5 billion in US shale assets. They have also contracted 5.8 million tonnes per annum of liquefied natural gas from the US and the first shipment is expected to be delivered to India in January 2018. India has encouraged state-controlled refiners to buy US and Canadian crude from the US Gulf Coast as it looks at cheaper alternatives that have emerged due to a global supply glut.The second shipment is expected in a month’s time. India, the world’s third-largest oil importer, joins Asian countries like South Korea, Japan and China, which have been buying US crude after production cuts by oil cartel OPEC drove up prices of West Asian heavy-sour crude, or grades with a high sulphur content.The important fact about US crude imports is that even after the transport costs, the oil is priced competitively compared to Gulf crude, which India has traditionally been buying.US crude has become attractive for Indian refiners after the differential between Brent (the benchmark crude or marker crude that serves as a reference price for buyers in the western world) and Dubai (a benchmark for countries in the east) narrowed. India hopes to chip away at the socalled “Asian premium” charged by West Asian exporters by diversifying its oil buys. While in the first purchase, IOC is importing 1.6 million barrels of high-sulphur crude Mars from the US and 400,000 barrels of Western Canadian Select oil, in the second it has bought 1.9 million barrels from the US, half of it shale oil.MaryKay Carlson, chargé d’affaires at the US embassy, termed the imports a significant milestone in the growing partnership between the US 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,” Carlson said.To encourage US crude purchases, the government has allowed refiners to use a foreign rather than an Indian owned vessel for the purchase. Indian refiners typically have to use domestic vessels for their crude imports. Indian government has also eased the rules for allowing VLCCs into Indian ports.