Texas has just sold $100 million of crude oil to India, in the first such exchange with that nation since the U.S. lifted its oil export ban in 2015. That’s good news for Texas – and for that troubled region.
“India purchased U.S. crude oil for the first time after the four-decade ban on exports of US oil was lifted,” reports the Huffington Post. “In August, Texas Governor Greg Abbott received papers of the shipment from Indian Ambassador to the United States Navtej Sarna for the first oil trade, which was worth $100 million. India is the world’s third largest oil importer - behind China and the United States - as well as the largest contributor to incremental oil consumption in 2016 among major economies. With huge demand of oil consumption and low domestic production, India is expected to increase oil imports over the next 20 years.”
India is already a good trading partner for Texas.
“As a top exporter to India with over $2 billion annually in exports and as the nation’s leader in crude oil reserve and production, Texas looks forward to our growing relationship with India,” Gov. Greg Abbott pointed out last month.”
And as the Times of India pointed out, “Over the next 20 years, India's energy consumption growth is projected to be the fastest among all major economies. And by 2035, China and India will have the largest share of global demand (35 per cent).”
And by the way, India is also signing contracts to purchase liquefied natural gas. Much of that LNG, shipping out of Cheniere Energy’s Sabine Pass terminal, will come from East Texas.
What does this mean for India? Some hints can be found in a May report from the industry blog Oilprice.com.
“Russian crude oil exports to India since the start of the year have topped 1 million tons (7.3 million barrels) and will in all likelihood continue to rise further, traders told Reuters and shipping data confirmed the information,” reporter Irina Slav wrote. “Until 2017, Russian Urals exports to India averaged 500,000 tons annually, or 3.6 million barrels, but now that the OPEC producers that used to supply more crude to India - chiefly Saudi Arabia and Iraq - are shrinking exports as part of compliance with the multilateral production cut agreement, Russian producers are swooping in to rake in their market share.”
We know that Russia uses its oil and gas wealth to pressure other governments. So does Iran - another nation that sells energy to India.
“A string of oil deals between Russian oil companies and Arab petrostates have shifted the center of political gravity in the Middle East and North Africa towards Moscow - counteracting the effect of decades of American military and political involvement as U.S. President Donald Trump’s plan for the region remains unclear,” pointed out another Oilprice.com article. “Russian oil and gas companies - all intimately related to [Russian President Vladimir] Putin’s personal wealth - have reaped the greatest rewards from Moscow’s intrigues.”
U.S. oil and gas exports will help counter the influence bad actors, such as Russia and Iran. And Texas is doing its part.