IOC will take delivery of two million barrels of the NorthSea crude in each of May and June, one of the sources said.Further details on the trades were not yet clear
State-run refinerIndian Oil Corporation (IOC) has made its firstpurchase of Norway’s Johan Sverdrup crude, buying four millionbarrels via a tender as it speeds up diversification of crudeimports, two trade sources told Reuters on Monday.
IOC will take delivery of two million barrels of the NorthSea crude in each of May and June, one of the sources said.Further details on the trades were not yet clear.
The move follows the Indian government’s call to cutdependence on crude from the Middle East in an escalatingstand-off between India, the world’s third-largest crudeimporter, and Saudi Arabia, the de-facto leader of theOrganization of Petroleum Exporting Countries (OPEC).
India complains that long-running OPEC production cuts havecreated uncertainty for customers and led to a surge in prices,creating fiscal challenges for a country where heavily-taxedretail fuel prices recently touched record highs, threatening aneconomic recovery.
Indian state refiners – top refiner IOC, Bharat PetroleumCorp, Hindustan Petroleum Corp and MangaloreRefinery and Petrochemicals Ltd – are planning to cutoil imports from Saudi Arabia by about a quarter in May, Reutersreported in March.
Oil from Johan Sverdrup, the largest North Sea discovery inmore than three decades, started to flow to Asia’s top oilimporters in late 2019, with India’s Reliance Industries Ltdamong its first takers.
While the grade has gained popularity among Chineseindependent refineries, it has rarely been supplied to India,trade flows data on Refinitiv Eikon show.
India last discharged a 1-million-barrel cargo of JohanSverdrup crude in September 2020, the data show.
Chinese refiners have slowed crude purchases in the spotmarket amid seasonal refinery maintenance and a large influx ofIranian oil, pressuring global oil sellers.
Indian refiners, meanwhile, are looking at crude from theUnited States, West Africa, South America and the Mediterraneanas alternative options as they diversify away from MiddleEastern oil, trade sources say.
Last month, HPCL-Mittal Energy loaded India’s first cargo ofGuyana’s Liza light sweet crude.
Another state refiner, BPCL, bought three million barrels ofU.S. light sweet grades, including West Texas IntermediateMidland and Eagle Ford, for arrival in May, a trade source said.