Indian refineries turn to US oil sources as sanctions block Russian stock
US sanctions crimped trade with Russia and forced processors to look elsewhere for supply. State-owned Bharat Petroleum Corp. and Indian Oil Corp., along with top private refiner Reliance Industries Ltd., have purchased about 7 million barrels of April-loading US crude so far this month, said traders who asked not to be identified.
That would be the largest monthly volume since May, according to Kpler. Russian crude flows to India surged after the invasion of Ukraine and the OPEC producer is still the biggest supplier to the South Asian nation, but tighter US sanctions have stranded cargoes and discounts have narrowed. India has also ramped up purchases recently from Saudi Arabia.
Bharat Petroleum, Indian Oil and Reliance Industries didn’t immediately respond to emails seeking comment. Most of the US crude purchased this month has been West Texas Intermediate Midland, and the delivered cost is more expensive than barrels from the Middle East, according to traders. Russia’s Sokol oil — which is comparable to WTI Midland — has been the most affected by the disruptions.
WTI Midland can produce more gasoline and diesel — fuels that are expected to see higher consumption in coming months due to the movement of people for local elections, rising power generation and crop harvesting, said Indian refinery officials who couldn’t be named because of company policy. “Given the issues faced with importing Sokol, it’s no surprise that Indian refineries are turning toward US WTI Midland as their light-sweet alternative," said Dylan Sim, an analyst at industry consultant FGE. US crude accounted for 10% of India’s imports in 2021 but slipped to as low as 4% over the last two years as Russia expanded its market share, according to Sim.
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