Indian refiners seeking to boost Saudi crude oil imports

Two Indian state refiners are seeking to boost imports of Saudi crude oil after the kingdom cut the official selling price of its key export grade for February to the lowest in 27 months, company sources said. Indian Oil Corp, the country’s top refiner, and Bharat Petroleum Corp, are looking at lifting an additional 1 million barrels of oil each from Saudi Aramco in February, the sources said.

Saudi Aramco typically notifies Asian buyers of their monthly crude allocations by the 10th of every month.

IOC is seeking more oil from Saudi Arabia and West Africa partly as it is facing problems in buying Russian light sweet crude Sokol because of challenges in payments, one of the sources said.

India, the world’s third-biggest oil importer and consumer, has been gorging on Russian crude, sold at a discount after western nations shunned purchases from Moscow.

That led to Russia becoming top oil supplier to India, knocking Iraq and Saudi Arabia to second and third place, data obtained from trade sources showed.

Washington last month sanctioned ships and vessel operators for the sale of Russian oil at above the $60-per barrel cap set by the Group of Seven nations and tightened rules, including heightened scrutiny by banks and service providers to ensure that cargoes do not breach the price cap.

Following the sanctions, several tankers meant to deliver Sokol crude to India have been diverted in the past two months depressing India’s Russian oil imports in December to an 11-month low.

India’s oil minister Hardeep Singh Puri recently said that the decline in India’s import of Russian oil was due to unattractive prices and not payment issues.

IOC used to receive 6-7 cargoes of Sokol oil every month under its annual deal with Rosneft.

The refiner may ask for additional supplies under its term deals with West African producers Nigeria and Angola to make up for loss in Russian oil supply.