Business

Indian Oil shifts to sweet crude amid Russian supply tightening

Recently, the United States imposed sweeping sanctions on Russia, targeting its oil producers and shipping networks. Because of this, many countries, including India, are finding it very hard to source crude oil from Russia.

Indian Oil Corporation (IOC), India’s largest oil refiner, said it had acquired 6 million barrels of sweet crude oil via tender for April delivery, news agency Reuters reported.

Trade sources told Reuters that the company’s move comes as new US sanctions on Russian oil producers and tankers disrupt shipments, creating challenges for importers to secure supplies from the world’s second-largest oil producer.

The United States recently sanctioned Russia with comprehensive sanctions against its oil producers and shipping networks. That move has severely handicapped many countries, including India, from sourcing as much Russian crude oil as possible. Therefore, alternative oil sources are the only viable way for Indian refiners such as IOC to continue sourcing oil to meet domestic demand.

The recent tender comes just a week after IOC bought 7 million barrels of spot crude from the Middle East and Africa. This included a rare procurement of Abu Dhabi’s Murban crude, showcasing IOC’s ongoing efforts to diversify its sources of crude oil amid global supply challenges.

In a related development, MRPL, the other Indian refiner, floated its first crude import tender in over a year but decided not to award it. The company has not mentioned any reason for not granting the tender. Still, market observers do not rule out the possibility of this being due to some pricing or supply-related issues.

Indian refineries have traditionally depended upon a blend of Russian, Middle East, and African crude oil for local fuel. However, IOC and all other refiners are now looking at different sources due to the sanctions.

Source
India Today

HD News Desk

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