Indian refiners are struggling to procure crude oil and some are issuing crude import tenders to solicit bids this month after the latest U.S. sanctions hit Russian supply, trade sources told Reuters on Tuesday.
Bharat Petroleum Corporation Ltd (BPCL) and Mangalore Refinery and Petrochemical Ltd (MRPL) have issued tenders this week to buy millions of barrels of crude for delivery in February and after that, following the most aggressive U.S. sanctions yet on Russian oil trade.
MRPL has issued its first crude import tender in over a year, in which it is asking for offers of 1 million or 2 million barrels on a cost and freight (C&F) or a delivered at port (DAP) basis to be delivered in the second half of February, according to Reuters’s sources.
BPCL seeks to buy 12 million barrels of UAE’s Murban crude in an annual tender, the sources said.
Separately, Indian Oil Corporation, the biggest state refiner, is buying Middle Eastern and African crude to replace Russian volumes affected by U.S. sanctions, including a cargo of Abu Dhabi Murban crude, which IOC does not normally buy.
Since the U.S. sanctions on Russian oil tankers, traders, companies, and insurers, tanker rates have doubled in one week and oil prices have rallied to a four-month high.
For India, which imports more than 80% of the crude it consumes daily, the costs are spiking and the cheap Russian barrels are disappearing as Indian refiners steer clear of tankers explicitly sanctioned by the U.S.
The biggest Indian state refiners are said to have asked one Middle Eastern exporter to offer alternative price quotes for its crude as India is scrambling for the cheapest possible supply amid soaring oil and shipping prices after the U.S. sanctions on Russia’s oil trade.
Indian Oil, Hindustan Petroleum Corporation Limited (HPCL), and BPCL have asked Abu Dhabi’s state giant ADNOC to provide pricing on a delivered-at-port (DAP) basis, in addition to the free-on-board (FOB) basis, which the exporters in the Middle East use in their term supply, refining sources told Reuters on Monday.
‘Delivered at port’ in crude trade includes the seller bearing the insurance, shipping, and other services costs. But ADNOC and other Middle Eastern producers have very rarely sold their crude on a DAP basis.
By Tsvetana Paraskova for Oilprice.com
