Indian Refiners Look More Widely For Oil After EU's Russia Curbs

Oil refiners in India, the biggest importer of Russian crude, may be looking at diversifying some buying away from Moscow after fresh European Union sanctions on the Kremlin amid the war in Ukraine.

Local processors are exploring options on some inputs, although it’s too early to say that they’ve switched out of typical Russian supply in a major way, according to traders and refinery executives, who asked not to be identified discussing private matters.

The global oil market is assessing the fallout from the EU’s latest wave of curbs, which included sanctions against a major Indian refiner that’s part Russian-held, a lower price cap, as well as imports of petroleum products made from Moscow’s crude. At the same time, investors are also contending with moves by OPEC+ to restore shuttered production, and the falllout from the US’s multi-front trade war.

Indian refiners are now reaching out more widely for crudes, with supplies being bought from places including Azerbaijan and Nigeria, as well as the United Arab Emirates, according to the traders. Like all major economies, India typically sources oil from a wide array of countries.

Among recent purchases, state-backed Mangalore Refinery & Petrochemicals Ltd. sought crude for late August to September delivery to New Mangalore, the traders said. That’s prompter-than-usual, they said, with the refinery eventually taking about 1.3 million barrels of Azeri oil. That’s also a type not typically bought by Indian processors.

Elsewhere, Hindustan Petroleum Corp. purchased West African crudes including Nigeria’s Bonny Light, Egina and Qua Iboe. In addition, private refiner Reliance Industries Ltd. bought Abu Dhabi’s flagship Murban grade — a premium crude that’s typically costlier compared with its staple diet of heavy Russian and Middle Eastern crudes.