India’s largest oil refiner has snapped up millions of barrels of crude from the US and United Arab Emirates, with the South Asian nation facing mounting pressure from Washington and Europe over its purchases from Russia.
State-owned Indian Oil Corp. bought at least 5 million barrels US crude, on top of 2 million barrels of supplies from Abu Dhabi, according to traders who asked not to be identified as they aren’t authorized to speak publicly. The purchases were both large and for relatively immediate delivery by the company’s usual standards. State-owned processors were told to come up with plans for buying non-Russian crude earlier this week.
An Indian Oil spokesman didn’t respond to a request for comment.
India’s refiners have been in the spotlight over the past two weeks, after being singled out by the European Union and the US for supporting Moscow during its war in Ukraine by buying Russian oil. US President Donald Trump has repeatedly threatened to impose secondary tariffs on buyers of Russian oil, and in a post earlier this week singled out India for criticism, saying that it would pay an additional economic penalty for its ongoing purchases.
“We are interpreting the increased buying activity from India as a sign of diversification away from Russian supply,” said Livia Gallarati, global crude lead at consultant Energy Aspects. “Physical players are unlikely to gamble on buying Russian barrels, especially at current high prices, even if skepticism remains over whether US President Donald Trump will follow through with these threats.”
This week, IOC sought crude supplies in multiple back-to-back purchase tenders, which traders said was unusual for the company and pointed to relatively urgent demand for crude. Earlier in the week, it also purchased 4 million barrels of West African barrels, as well as the UAE’s Murban crude for delivery during the same period.
India has become the world’s biggest buyer of Russian seaborne exports of crude, soaking up discounted barrels and ramping up its purchases from almost zero to about one-third of its imports. This has come from streams such as Urals crude, and at the expense of more traditional supplies from the Middle East and Africa.
The country’s refiners can currently make about $3 a barrel more by purchasing US supplies rather than Murban for cargoes arriving in November, Gallarati added.
“The stronger Indian buying of Atlantic Basin crude is definitely supportive of prices,” she said.
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