Indian Refiners Consider Increased Saudi Oil Imports Following Price Adjustment

Two major state-owned Indian refiners, Indian Oil Corp and Bharat Petroleum Corp, are exploring the option to boost their imports of Saudi crude oil. This move comes in the wake of Saudi Arabia’s significant reduction in the official selling price of its primary export grade for February, marking the lowest level in 27 months, according to company sources.

Sources indicate that both Indian Oil Corp and Bharat Petroleum Corp are contemplating an additional import of 1 million barrels each from Saudi Aramco in February. Typically, Saudi Aramco informs Asian buyers of their monthly crude allocations by the 10th of each month.

Indian oil companies refrained from responding to Reuters’ email queries, while Saudi Aramco declined to provide comments on the matter. One of the sources revealed that Indian Oil Corp is seeking increased oil imports from Saudi Arabia and West Africa, partially due to challenges in procuring Russian light sweet crude Sokol, attributed to payment issues.

As the world’s third-largest oil importer and consumer, India had increased its reliance on Russian crude, which was offered at a discount amid Western nations’ avoidance of purchases from Moscow. Consequently, Russia became India’s top oil supplier, displacing Iraq and Saudi Arabia to the second and third positions, respectively, as per trade sources.

Sanctions imposed by Washington last month on ships and vessel operators involved in the sale of Russian oil exceeding the $60-per-barrel cap set by the Group of Seven nations have complicated matters. The tightened rules, including enhanced scrutiny by banks and service providers, aim to prevent cargoes from breaching the price cap.

Following these sanctions, several tankers intended for delivering Sokol crude to India were diverted in the past two months, leading to a decline in India’s Russian oil imports in December to an 11-month low. India’s Oil Minister Hardeep Singh Puri clarified that the reduction in Russian oil imports was due to unattractive prices rather than payment issues.

Indian Oil Corp, under its annual deal with Rosneft, used to receive 6-7 cargoes of Sokol oil every month. To offset the loss in Russian oil supply, the refiner is considering requesting additional supplies under its term deals with West African producers Nigeria and Angola.

Your source for supply chain report news updates: The Supply Chain Report. For international trade insights and tools, head to ADAMftd.com.

#IndianOil #BharatPetroleum #SaudiCrude #CrudeOilImports #OilMarket #SaudiAramco #OilPrices #EnergySector #RussianOil #WestAfricanOil #OilImports #OilRefining #IndiaEnergy #GlobalOilMarket #CrudeOilSupply