Importing crude oil from Canada is currently not feasible for India due to the high cost required to transport oil from the country, a senior government official told Moneycontrol.
“The pipeline infrastructure within Canada is currently not developed enough for India to begin importing (crude oil) from there. It would not be economical,” the official said.
Canada primarily exports crude oil to the United States. The country does not have required infrastructure to transport crude oil pumped in remote areas to ports, from where oil could be shipped to other markets including India.
Meanwhile, India has been looking to broad-base its crude oil sourcing to ensure energy security in the wake of changing world geopolitics and conflicts including the recent Iran-Israel tensions and the ongoing Russia-Ukraine war. Additionally, longer shipping routes, in comparison to Middle East countries, would be an added cost for Indian refiners when it comes to sourcing crude from Canada.
Moneycontrol had earlier reported that Indian oil refiners are exploring the opportunity of importing Canadian crude oil.
India largely imports crude oil from Russia and traditional Middle Eastern suppliers including Iraq and Saudi Arabia. However, as India’s oil demand continues to rise, the country is looking at diversifying its crude basket.
In the first half of August, India bought maximum volumes of crude from Moscow at 1.8 million barrels per day (bpd) despite narrowing discounts and the US imposing penalty on New Delhi for buying Russian oil, shows data from Kpler, a global real-time data and analytics provider.
Crude oil supply from Iraq and Saudi Arabia came in at 655,000 bpd and 744,000 bpd, respectively, in the first 15 days of the month. Indian refiners ramped up oil imports from United Arab Emirates (UAE) and the US to 987,000 bpd and 404,000 bpd, respectively, showing New Delhi’s strong focus on diversification. India imported 448,000 barrels of crude oil from UAE and 364,000 bpd from the US in July.
Indian refiners now buy crude oil from 40 nations, compared to 27 countries in 2007. State-run refiners include Indian Oil Corporation Limited, Bharat Petroleum Corporation Limited and Hindustan Petroleum Corporation Limited, while leading private oil companies include RIL and Nayara Energy Limited.
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