Indian refiners are going shopping as far as North and South America, buying some crude grades for the very first time, as the world’s third-largest oil importer looks to diversify its oil imports away from the Middle East.
India’s HPCL-Mittal Energy Ltd, a joint venture of state-run Hindustan Petroleum Corporation and steel tycoon Lakshmi Mittal, has bought the country’s first-ever crude oil cargo from the newest oil-producing nation, Guyana, a source familiar with the plan told Reuters this week.
Mangalore Refinery and Petrochemicals Limited (MRPL), for its part, has booked a cargo of Brazil’s grade Tupi for the first time, according to Bloomberg.
Indian refiners are also snapping up more crude oil from American producers as the country looks intent on cutting its dependence on crude from the Middle East and is looking for cheaper options, arbitrage permitting.
India, which relies on imports for more than 80 percent of its consumption and whose imports from the Middle East account for around 60 percent of all foreign shipments, has been displeased with the OPEC+ oil supply management since the beginning of the year, unhappy that high oil prices are lifting its import bill and domestic inflation.
Earlier this month, India expressed its frustration with the OPEC+ decision to keep the group’s production nearly flat in April compared to March, calling out OPEC+ for its “artificial cuts to keep the price going up.”
Days after OPEC+ surprised the market by deciding not to lift collective oil production from April, leaving only small exemptions to Russia and Kazakhstan, India asked its state-owned refiners to aggressively look to diversify imports away from the Middle East.
India is estimated to have boosted significantly crude oil imports from the United States in February, while it slashed purchases from Saudi Arabia to the point of America overtaking the Saudis as India’s second-largest oil supplier. Indian state refiners are reportedly looking to more supply cuts from Saudi Arabia in the coming months, sources with knowledge of the plans told Reuters last week.