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India’s top refiner, the Indian Oil Corporation (IOC), has purchased 7 million barrels of Middle Eastern and African crude oil on the spot market through a tender, which also included the rare Murban grade from Abu Dhabi, according to trade sources. This move comes as the US imposes its latest sanctions on Russia, expected to impact this crucial supply source.
Following Washington’s announcement of sweeping sanctions targeting Russian producers and tankers, disrupting supply from the world’s second-largest producer and tightening vessel availability, Indian refineries are ramping up their spot market purchases of Middle Eastern crude.
Trade sources also revealed that Totsa, the trading arm of French giant TotalEnergies, sold a 2-million-barrel cargo of Murban crude to IOC on a spot basis. The cargo was sold at a premium of at least $5 per barrel over Dubai quotes. According to an oil industry official, other Indian state-owned refineries are expected to issue tenders for spot cargoes as well.
The supply of Russian oil to Indian state-owned refineries has been impacted by US sanctions on Russia’s two largest producers. Russia has been supplying low-sulfur Arctic grades like Novy Port, ARCO, and Varandey to India, according to sources.
IOC’s other purchases include a very large crude carrier (VLCC) containing 1 million barrels each of Nigerian Agbami and Akpo crude and 1 million barrels of Gabon’s Rabi Light from Shell (UK). Additionally, they secured another large cargo of 1 million barrels each of Agbami and Angolan Nemba crude from Chevron (US).
Earlier this week, IOC floated tenders seeking sour and sweet crude for loading from mid-February to early March 2025.
Middle Eastern spot crude prices surged on January 16, reaching their highest level in over two years. This surge was driven by robust demand from top importers China and India, who are seeking alternatives to sanctioned Russian and Iranian supplies.
In terms of Russian exports, Moscow’s crude oil exports for 2024 were approximately 80,000 barrels per day, or 2.5%, lower than the 2023 full-year average. In the first half of January, Russia’s seaborne crude exports fell to their lowest level since August 2023.
According to Oilprice
