India’s Reliance Industries Ltd. has bought millions of barrels of crude from the Middle East and US after Washington sanctioned two Russian producers, raising concerns about a disruption to oil flows.
The private refiner purchased several grades, including Saudi Arabia’s Khafji, Iraq’s Basrah Medium and Qatar’s Al-Shaheen, along with some US West Texas Intermediate crude, said traders familiar with the matter, who asked not to be identified because they’re not authorized to speak to the media. Cargoes are expected to be delivered in December or January, they added.
Reliance has been India’s biggest importer of Russian oil by volume this year, taking crude via a long-term contract with Rosneft PJSC — one of the blacklisted companies. While the processor also purchases Middle Eastern grades regularly, the recent buying, including some transactions earlier this week prior to the US sanctions, has been more active than usual, the traders said.
Overall, Reliance has bought at least 10 million barrels from the spot market this month, with Middle Eastern grades making up the bulk of those purchases, and most of the crude acquired after the US penalties, the traders said.
Reliance is currently assessing the implications of various sanctions on Russian oil flows and the export of refined products to Europe, a company spokesperson said in a statement on Friday.
The refiner’s supply contracts will evolve to “reflect changing market and regulatory conditions” and its diversified crude-sourcing strategy will ensure reliability in its operations, the spokesperson said.
Other Indian refiners are also in the market for spot cargoes, particularly from the Middle East, the US and Brazil, the traders said. Prices for grades such as Oman strengthened on Thursday, while prompt timespreads for the region’s benchmark Dubai rose. Global benchmark Brent surged more than 5% following the sanctions announcement.
Flows of Russian oil to major Indian refiners are expected to fall sharply after Rosneft and Lukoil PJSC were sanctioned, with the possible exception of Rosneft-backed Nayara Energy Ltd. Some Chinese companies have also paused purchases as they assess the impact of the US penalties.
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