Indian refiners are searching for crude oil supplies from as far afield as Angola and Venezuela as escalating tensions in the Middle East disrupt term cargoes and restrict shipments through the Strait of Hormuz.
Some of India’s largest state-owned refiners are testing new crude grades to replace supplies delayed or stranded by the conflict, senior refinery executives told the Economic Times. India is the world’s third-largest crude oil importer.
“We diversified our crude sourcing outside of the Strait of Hormuz, exploring multiple geographies including two new crude grades from Venezuela and Angola,” Vetsa Ramakrishna Gupta, finance director at state-run Bharat Petroleum Corporation Limited, told the Indian publication.
Hindustan Petroleum Corporation Limited said it received barely any of its contracted Middle Eastern supplies during the first quarter because cargoes were stranded in the Persian Gulf, west of the Strait of Hormuz.
“This time in the first quarter, we hardly got anything from our term contracts because a lot of the term contracts were sitting on the other side of Strait of Hormuz,” HPCL managing director Vikas Kaushal said.
“We had to make decisions based on availability rather than optimisation,” he added.
The disruption is forcing Indian refiners to accelerate efforts to diversify their supply sources, even as the country’s crude imports from Russia remain close to record levels in July following the expiry of a US waiver the previous month.
Several state-owned refiners have also suspended crude loadings from Iraq amid worsening hostilities and the abrupt halt to tanker traffic through the Strait of Hormuz.
Indian Oil Corporation and Mangalore Refinery and Petrochemicals Limited have reportedly paused Iraqi loadings. Indian Oil abandoned plans to load the supertanker Lila Jamnagar after concluding that sending a fully laden vessel carrying about 2 million barrels through the strait was no longer worth the risk.
