India’s top refiner buys its first type of oil
India’s top refiner Indian Oil Corp, which seeks to diversify its crude purchases, has made its first purchase of Guyana’s Liza light sweet crude, according to a source.
This makes Indian Oil Corp the first Indian state refiner to buy Liza oil. However, this will not be the first time an Indian company has bought Liza Oil. A joint venture between state-run Hindustan Petroleum Corp and steel tycoon L.N. Mittal, known as HPCL-Mittal Energy Ltd. bought a million barrels of Liza crude in March earlier this year.
According to Refinitiv data, the deal between IOC and Liza is of 1 million barrel cargo, which is set to arrive in India’s Paradip port, Odisha around August 8, after setting sail around July 4 on Greece-flagged tanker Miltos.
It was further revealed by the source, without providing any details of the pricing, that this would be a ‘trial cargo’. India is currently in talks with the government of Guyana for a term oil supply contract for state refiners, the source added.
Presently, IOC has declined to comment. India is the world’s third-biggest oil importer and consumer. The country highly depends on the Middle East and ships in more than 80% of its oil needs from overseas.
India has a 5 million barrel per day refining capacity, out of which state refiner IOC, HPCL, Bharat Petroleum and Mangalore Refinery and Petrochemicals Ltd together control about three-fifths of it.
After the Organization of Petroleum Exporting Countries and its allies, known as OPEC+ declined to ease supply curbs, leading to a spike in global prices of oil, India asked the state refiners to accelerate the diversification of crude sources.
Oil minister Dharmendra Pradhan has again requested OPEC+ to consider easing supply curbs, ahead of the group’s meeting on 1 July, to decrease the rate of inflation and enable the demand-led recovery of oil prices, which are currently at an all time high due to an increased tax on retail prices of gasoline and gas oil.