Facts:
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Iraq has overtaken Saudi Arabia to become India’s top crude oil supplier by supplying 38.9 million tonnes (MT) crude oil in the current financial year.
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India is 80% dependent on imports to meet its oil needs.
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Saudi Arabia traditionally has been India’s top oil source but Iraq dethroned it.
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Iran continued to be third largest supplier, selling 18.4 MT during April-January.
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Venezuela is India’s fourth largest supplier with 15.5 MT during April-January, followed by Nigeria with 14.9 MT.
Imports from West Asia
India’s dependence on West Asia for its crude oil needed has increased from 58% in 2014-15 to 63.7% in April-January period of this fiscal.
Reasons for increase of imports from Iraq
Iraq was able dethrone Saudi Arabia as India’s largest crude oil supplier mainly by supplying heavily discounted crude compared to crude oil sold by Saudi Arabia at Official Selling Price of OPEC. In given time period, prices of crude oil had shot up following production cuts by OPEC members. However, Iraq did not followed the aggressive pricing due to its heavy dependence on oil revenues to fund its economy. Moreover, Indian refiners in recent years have invested heavily in modernising plants to more efficiently process low grade crudes including Basra heavy crude from Iraq, giving greater flexibility in the cost-saving oil grades they can buy.