India’s recent crude import agreement with Argentina marks a significant shift in the country’s approach to sourcing oil, especially as it seeks to diversify its suppliers beyond OPEC nations. This deal, the first in eight years, highlights India’s growing interest in tapping emerging markets for energy needs.
Indian Petroleum Minister Hardeep Singh Puri recently engaged with an Argentine delegation to discuss energy collaboration, coinciding with Bharat Petroleum Corporation Limited’s shipment of 700,000 barrels of Medanito crude from Argentina. The purchase aligns with India’s strategy to adjust its crude procurement in light of increased market volatility due to sanctions on Russia.
Abhishek Ranjan from S&P Global noted that BPCL’s decision reflects a broader trend where Indian refineries are rebalancing their crude sources. Notably, prior to this deal, India last imported from Argentina in 2018.
With Argentina ramping up its oil production, primarily driven by developments in the Vaca Muerta shale formation, there is optimism for future collaborations. The U.S. Energy Information Administration reports that Argentina’s production has surged, supported by technological advancement in shale extraction.
The country’s oil output has reportedly achieved a 23-year high, indicating its potential to supply more to global markets, including Asian nations. Despite challenges in adopting Medanito crude due to its similarity to U.S. crude, Indian refiners are anticipated to navigate these complexities effectively, thanks to their advanced facilities.
Additionally, the revival of interest in U.S. crude further complicates the dynamics as India aims to balance its imports strategically. Beyond oil, India and Argentina are also exploring partnerships in LNG and critical minerals, signaling a deepening bilateral relationship.