India delays resumption of crude purchases from Middle East

India’s state-owned oil refiners have already secured sufficient crude supplies to cover roughly the next two months and are not urgently seeking to restart purchases from the Middle East, even if the Strait of Hormuz is reopened for commercial shipping, The Economic Times reports, citing individuals familiar with the matter.

The outlet said local refiners have been encouraged by suppliers in the Middle East — including Abu Dhabi National Oil Company — to lift their agreed volumes under long-term contracts.

However, the refiners have not yet made any firm commitments.

The global oil market is closely watching developments around the strategic waterway after the United States and Iran reached a temporary peace arrangement this week that is expected to restore transit through the area. During the period of conflict, energy flows were heavily disrupted, with shipments almost completely halted amid restrictions affecting the strait. Cargo movements are now gradually resuming as vessels begin to pass through again.

India’s imports of crude from the Middle East — much of which typically arrives under long-term agreements — dropped in the second quarter to their lowest level since at least 2013, based on data from Kpler.

This decline came as state refiners increased purchases of spot cargoes from alternative sources, including Russia and South America, to compensate for reduced supply from the Gulf region.

Officials in New Delhi have not yet decided when it will be safe to resume normal crude shipments from the region, according to the same sources. Indian state refiners generally buy Middle Eastern crude on a loading basis, meaning they are responsible for arranging shipping logistics.

Refiners are also preparing for the possibility of higher freight costs, as global buyers compete for available tankers amid uncertainty about how stable the ceasefire will be.

This environment makes discounted cargoes from suppliers such as Russia — typically sold on a delivered basis — comparatively more attractive.

Even though US exemptions on Russian oil purchases expired on Thursday, Indian refiners are still expected to continue importing Russian crude, as companies have already developed alternative compliance routes, the sources said. Russian barrels remain competitively priced, trading at discounts of around $1 to $2 per barrel against Dated Brent, with the possibility of further price reductions if supply increases.

The New Delhi-based state refiner has also been exploring tanker availability in the market, but officials reportedly cautioned that this should not be interpreted as a sign of an immediate return to Middle Eastern crude purchases.

By Bakhtiyar Abbasov