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Indian state refiners may purchase Mideast spot oil to replace Russian shortfall

Indian state refiners are considering tapping the Middle East unrefined market as spot supply from their leading provider Russia have fallen, three refining sources said, in a move that might support costs for highsulphur oil.

The three large state refiners- Indian Oil Corp, Bharat Petroleum Corp and Hindustan Petroleum - are short of 8-10 million barrels of Russian oil for January loading, the sources told Reuters.

The refiners fear continued issues in securing Russian oil in the area market might continue in coming months as Moscow's. own need is rising and it has to satisfy dedications under the. OPEC pact.

Nevertheless, they included that they can draw from their. stocks to meet crude processing needs in March.

Two of the sources stated their business may lift more unrefined. from Middle East suppliers under optional volumes in term. contracts or to float a spot tender for high-sulphur oil.

IOC, the country's top refiner, previously floated spot. tenders to buy sour grades in March 2022.

The business did not right away respond to ask for. remark.

India ended up being the biggest importer of Russian crude after the. European Union, previously the leading buyer, enforced sanctions on. Russian oil imports in reaction to the 2022 intrusion of Ukraine. Russian oil represent more than a third of India's energy. imports.

Russia's area crude exports have fallen given that November. as its refineries resumed operations after the maintenance. season and poor weather interfered with shipping activities, traders. said.

We have to check out alternative grades as Russia's own. need is rising and it needs to fulfill its dedications under OPEC,. stated another of the 3 sources.

Russia, an ally of Company of the Petroleum Exporting. Nations, guaranteed to make additional cuts to its oil output from. the end of 2024 to compensate for overproduction previously.

Likewise, many materials from Russia's state oil company Rosneft. are tied up in a deal with Indian personal refiner. Reliance Industries, Reuters reported earlier this. month.

The new deal represent approximately half of Rosneft's seaborne. oil exports from Russian ports, leaving little supply readily available. for spot sales, sources told Reuters previously this month.

India has no sanctions on Russian oil, so refiners there. have cashed in on materials made cheaper than rival grades by the. penalties by at least $3 to $4 per barrel.

Sources said there are traders in the market that are. going to provide Russian oil for payments in Chinese Yuan however. noted that state refiners stopped spending for Russian oil in the. Chinese currency after suggestions from the federal government in 2015.

It is not that options to Russian oil are not. offered in the market but our economics will suffer, the. initially source stated.

(source: Reuters)