State-run oil firms could turn to US crude after sanctions on Iran: Report

State-run oil marketing companies (OMCs) are working on long-term crude supply contracts and increasing spot purchase of crude oil from the United States (US), according to a Mint report citing sources.

The US on Wednesday asked all countries to stop oil imports from Iran by November 4 this year, adding that waivers are unlikely.

Iran is India's third-largest oil supplier, after Iraq and Saudi Arabia. India is the second-largest buyer of Iranian oil after China.

"We are looking at increasing our crude oil basket from the US as it will give us more flexibility when the variations in crude prices happen between Brent and Dubai and Brent and WTI (West Texas Intermediate). US crude is certainly being looked at as it continues to remain competitive for us," an official from an OMC told Mint.

Moneycontrol could not independently verify the news.

A spokesperson from Indian Oil Corporation Ltd told the paper that while the company already imports US crude oil in spot purchase, it is considering firming up contracts as well.

"IOCL as of today has struck deals for importing 10 million barrels from six cargoes in the spot market. We are regularly taking spot cargoes but are now also looking at term deals, provided rates are competitive," IOCL told Mint.

Firms will need to get the best possible deal since the US has multiple sources of crude oil.