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India’s largest state-owned oil refining company, Indian Oil Corporation (IOC), has purchased its first-ever crude oil shipment from Ecuador, marking a significant step in diversifying its supply sources and reducing reliance on Russian oil amid tightening U.S. sanctions.
According to trade sources speaking with Reuters, IOC acquired 2 million barrels of Oriente crude, a medium-heavy grade with high sulfur content, through an international tender. The shipment is scheduled for delivery by late March.
This marks IOC’s inaugural crude oil import from Ecuador, a South American producer, as Indian refiners intensify efforts to replace Russian oil, which previously constituted a substantial portion of the country’s imports.
Since the onset of the Russia-Ukraine conflict in February 2022, India has significantly increased its purchases of Russian crude at deep discounts. The total value of Russian oil imported by India during this period is estimated at $168 billion, per market sources.
However, new U.S. sanctions targeting Russian energy giants Rosneft and Lukoil have substantially narrowed the availability of legally compliant Russian oil for Indian refiners.
IOC has affirmed its commitment to full compliance with U.S. sanctions. The company has secured financing to continue purchasing Russian oil from non-sanctioned entities, with deliveries expected early this year.
In October, IOC purchased five Russian crude oil shipments from non-sanctioned suppliers, slated for December arrival. However, trade sources indicate that legally compliant Russian oil volumes remain insufficient to meet demand from India’s largest refinery.
Against this backdrop, IOC and other Indian refiners are expanding their search for alternative supply sources in Latin America and West Africa.
Last December, IOC acquired its first crude oil shipment from Colombia under a flexible supply agreement with state-owned Ecopetrol. The Ecuador purchase further underscores a strategic shift toward geographically distant but politically and legally safer producers.
This supply diversification aligns closely with New Delhi’s diplomatic and trade engagements with Washington.
Sources familiar with the matter report that the Indian government is mandating weekly, precise, and timely data submissions from domestic refiners on crude oil imports from Russia and the U.S. These figures will be leveraged in trade negotiations with the United States.
IOC’s increased oil imports from Ecuador, Colombia, and other Latin American nations are viewed as a strategic maneuver to safeguard energy security while mitigating political risks in U.S. relations.
Source: Oilprice
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