Indian oil refineries are cutting purchases of Russian crude from elevated levels amid the impact of attacks on supplies from the country's leading supplier, Bloomberg reports, writes UNN.
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In view of the pressure on Moscow's oil exports, the publication writes, refiners are seeking alternative barrels from regions including West Africa and even the Americas, as well as turning to suppliers from the Persian Gulf, despite supplies through the Strait of Hormuz remaining limited due to the war between the US and Iran.
The shift in Indian refiners' purchasing patterns coincides with expected growth in domestic demand, as the refinery maintenance season comes to an end, allowing refineries to increase production volumes and boost output.
The global oil market is struggling with disruptions caused by Russia's wars against Ukraine and in the Middle East, the publication writes. Russia became India's dominant supplier after the war in Ukraine began in 2022, and last month flows from the OPEC+ producer accounted for more than half of its imports, the publication notes.
According to Sumit Ritolia, a senior modeling manager at analytics firm Kpler, imports of Russian crude are expected to fall to around 2 million barrels per day this month, compared with a peak of about 2.8 million barrels per day in July.
The decline reflects "some normalization after very strong crude-buying in recent months, lower Russian export availability and increasing competition from China," as well as the maintenance, Ritolia said.
Flows from Russia to India are now expected to normalize above 2 million barrels per day in the coming months, he added.
Indian Oil Corp., the country's largest refiner, recently announced tenders for supplies from such distant regions as North and South America—a rare move—as well as another tender focused primarily on crude from the Persian Gulf, the publication writes.
Industry peers Hindustan Petroleum Corp. and Mangalore Refinery & Petrochemicals Ltd. also made emergency purchases of non-Russian crude this week. IOC, HPCL, and MRPL did not immediately respond to requests for comment.
Over the past four weeks, Russia's overseas shipments fell to approximately 3.5 million barrels per day from a peak of more than 4 million barrels per day in July, according to tanker-tracking data compiled by Bloomberg.
India has also been competing with China for discounted barrels, Ritolia of Kpler reports. October Sokol cargoes, supplied from eastern Russia, were purchased unusually early, indicating stronger so-called forward demand and growing interest in available grades, he added.
India and China do not usually compete with each other for Western and eastern Russian crude grades, respectively, but a tightening market could change this situation, the publication writes.