Indian Oil Corporation, the biggest refiner in the country, has purchased about 7 million barrels of crude from the U.S., the Middle East, and Canada in a spot tender last week, partly to replace Russian crude, which is now on hold at India’s state refiners.
IndianOil has bought 4.5 million barrels of U.S. West Texas Intermediate Midland, 2 million barrels of Abu Dhabi’s Das crude, and 500,000 barrels of
Western Canadian Select (WCS) crude, anonymous trade sources told Reuters on Monday.
IndianOil and the other state-owned Indian refiners have not attempted to buy crude from Russia in the past week, although they have regularly imported Russian oil on a delivered basis.
Last week, U.S. President Donald Trump threatened secondary tariffs on the buyers of Russian oil, while discounts of Moscow’s crudes narrowed to alternatives.
IndianOil, Bharat Petroleum Corporation Ltd (BPCL), Hindustan Petroleum Corporation Limited (HPCL), and Mangalore Refinery and Petrochemicals Limited (MRPL) have paused purchases of Russian crude, awaiting government guidance and clarity over the threatened “penalties” on India for buying Russian crude oil.
Instead, the four state-controlled oil refiners, which account for over 60% of India’s refining capacity, have sought additional barrels from the Middle East and West Africa on the spot market.
Crude from the U.S. has also become attractive in recent weeks, as rising prices of Middle Eastern crudes have opened the arbitrage window for WTI crude to flow to Asia.
The prices for Middle Eastern crudes going to Asia have jumped amid concerns that the cheap Russian supply, favored by China and India, could see disruptions if President Trump makes good on his threat to impose “penalties” or secondary tariffs on the buyers of Russian oil.
While Indian refiners are scrambling to understand the implications of President Trump’s threatened “penalties” on India for buying Russian oil, at least four tankers carrying crude cargoes from Russia were staying idle off India’s west coast on Friday, ship-tracking data compiled by Bloomberg showed last week.
By Tsvetana Paraskova for Oilprice.com
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