India may increase oil imports from Brazil and Mexico to offset the loss of Venezuelan oil in the wake of US sanctions on that country, says a IANS report.
Venezuela is the fourth largest oil supplier to India after Saudi Arabia, Iraq and Iran. It accounted for about 11 per cent of India’s oil supplies in 2017-18, supplying close to 18 million tonnes (mt). But the oil imports from Venezuela have come under threat following the US sanctions, forcing Indian companies to scout for alternate markets.
Diplomatic sources said that both Brazil and Mexico have expressed their desire to strengthen energy sector cooperation and India is evaluating the option and will take a call once it gets reports from its public and private sector oil marketing companies.
India is already importing oil from both Brazil and Mexico but the quantity had come down progressively since 2013. While India imported crude worth $ 3.50 billion and $ 1.78 billion from Mexico and Brazil respectively in 2013, this went down to $1.38 billion and $0.81 billion now.
Both countries are also leading producers of oil, with Brazil at the 10th largest oil producer globally with a production of about 150 million tonnes (mt) of crude and Mexico at 11th position (production 110 mt).
Mexico’s state oil company Pemex has reported a decline in production due to its ageing fields resulting in lower output. But the situation may change soon with a new government pushing up production focusing on inviting foreign investment in their fields. Brazil also is undertaking big reforms in the energy sector to increase production and exports of oil.
India imported 155 mt of oil in 2017-18. The imports are expected to hit over 170 mt in FY19 with Saudi Arabia being the largest supplier followed by Iraq and Iran. Oil imports from Iran are already on the decline due to US sanctions. This is expected reduce further once the US removes the waiver given to certain oil importing countries.