NEW DELHI -(Dow Jones)- India has asked Saudi Arabia, its largest crude oil supplier, to augment daily shipments by up to 100,000 barrels each year over the next few years to meet expanding refining capacities at home, Oil minister Jaipal Reddy said Thursday.
Reddy was speaking to reporters after meeting Saudi Arabia’s assistant minister for petroleum affairs, Abdulaziz bin Salman bin Abdulaziz.
“The [Saudi] minister assured us that our request will be positively looked into,” Reddy said.
Saudi Arabia exported 547,236 barrels a day to India in the financial year that ended March 31, 2011, comprising nearly 17% of the South Asian nation’s total crude oil imports.
India’s plan to boost crude imports from Saudi Arabia come as Indian Oil Corp., Mangalore Refinery & Petrochemicals Ltd., Bharat Petroleum Corp., Hindustan Petroleum Corp. and Essar Oil Ltd. seek to expand their capacities as a growing economy drives demand for fuel products.
Saudi minister Abdulaziz said Indian companies will approach state-run Saudi Aramco with their additional crude demand and companies of the two countries will “work it out on a commercial basis.”
The world’s largest crude oil exporter is producing 9.8 million barrels a day crude and has spare capacity of 2.5 million barrels a day, he said, adding that the oil markets were currently well-supplied and there was “no need to be concerned.”
Global crude markets have been rattled with fears of supply disruptions owing to U.S. and European Union sanctions on Iran on the Islamic Republic’s nuclear program. Iran is India’s second-largest supplier after Saudi Arabia.
Reddy said India’s plans to raise imports from Saudi Arabia isn’t connected with any development related to Iran.
“Our relationship with Saudi Arabia is purely bilateral. It is our single-biggest supplier. We have been seeking to increase supply every year. It’s the same this year,” Reddy said. “It has no relationship to our ties with any other country, including Iran.”
He said India’s imports from Iran in the next financial year will be almost unchanged from this year. He didn’t say how much will India import this year.
India sourced 369,980 barrels a day crude from Iran in the year ended March 31, 2011.
-By Rakesh Sharma and Santanu Choudhury, Dow Jones Newswires