Indian Oil shifts away from Russian crude, buys 7 million barrels from US, Mideast

Indian Oil Corporation (IOC), India’s largest refiner, has purchased 7 million barrels of crude oil for September delivery from the United States, Canada, and the Middle East, according to several trade sources on August 4.

The bulk purchase follows the opening of the arbitrage window for US crude to Asia and comes as Indian state refiners have temporarily halted purchases of discounted Russian crude. This move occurs amid warnings from US President Donald Trump urging countries not to buy oil from Moscow, which faces sanctions due to its full-scale invasion of Ukraine in February 2022, Caliber.Az reports, citing Reuters. 

IOC acquired 4.5 million barrels of US crude, 500,000 barrels of Canada’s Western Canadian Select (WCS), and 2 million barrels of Das crude from Abu Dhabi. Sources familiar with the deals, who requested anonymity as they were not authorized to speak publicly, said the higher-than-usual purchases are partly intended to replace Russian crude oil barrels.

India is the world’s third-largest oil importer and the largest buyer of seaborne Russian crude. However, Indian state refiners—including IOC, Hindustan Petroleum Corp, Bharat Petroleum Corp, and Mangalore Refinery Petrochemical Ltd—have reportedly not sought Russian crude for about a week, Reuters reported last week.

In IOC’s recent tender, which closed on Friday, P66 and Equinor will each supply 1 million barrels of US West Texas Intermediate Midland crude, while Mercuria will ship 2 million barrels of the same grade. Vitol will deliver 1 million barrels of WTI Midland and WCS, and Trafigura is set to supply 2 million barrels of Das crude.

Prices for the transactions were not immediately disclosed. The purchases come amid additional sanctions imposed by the European Union targeting Russian energy trade.

By Sabina Mammadli