Latest news with #IndianRefiners
Yahoo
2 days ago
- Business
- Yahoo
Nigerian Oil Stands to Gain as India Shies Away From Russian Crude
A week ago, U.S. President Donald Trump came down hard on India, doubling its tariff rate from 25% to 50% for fueling Putin's war in Ukraine by continuing to buy massive quantities of Russian oil. We reported that India's imports of Russian commodities have skyrocketed since the war began, surging to $65.7 billion in 2024 from $8.25 billion in 2021, according to India's The Business Standard. In sharp contrast, imports by the European Union and the U.S. have declined by more than 80% as they look to choke Russia's war machine. And now India has rapidly moved to distance itself from Moscow, turning to Africa and other suppliers as it goes into a buying frenzy. In recent weeks, Indian refiners have purchased two million barrels of Nigerian crude for September and October delivery; one million barrels of Angola's Girassol, three million barrels of Abu Dhabi Murban, and a million barrels of U.S. Mars. Interestingly, India is returning to the spot market, with Punch reporting that state refiner Bharat Petroleum Corporation Limited (BPCL) has made spot purchases and also negotiated for September deliveries. Over the past couple of years, India has become the biggest buyer of discounted Russian crude, accounting for 40% of its total imports at its peak in 2024. This was enough to meet India's surging oil demand and keep it off the spot might be the beginning of a long-term relationship between India and Nigeria, thanks to the low sulfur content of Nigerian crude grades, making them ideal for India's refineries. However, India will now have to contend with Africa's largest refinery–the Dangote Refinery. According to Devakumar Edwin, vice president Dangote Industries, the giant refinery will buy 100% of its crude from the Nigerian market by the end of the current year, a reversal from its earlier trend of buying most of its crude from the United States, Brazil, Equatorial Guinea, Angola and Ghana. Owned by Nigeria's and Africa's richest man, Aliko Dangote, the 650,000-barrel-per-day refinery began operations in 2024 after repeated delays. Ranked as having a higher capacity than Europe's largest refineries, the $20-billion refinery now produces diesel, gasoline, aviation fuel and naphtha. Though yet to ramp up operations to full capacity, the Dangote refinery has been a major milestone for Nigeria and Africa's energy sector, transforming Africa's largest oil producer into a net exporter of petroleum products. However, the refinery was initially forced to rely on large volumes of imported crude, with local traders unable to meet its demand. Thankfully, improving coordination between the refinery, the Nigerian government and local oil traders has made the supply of domestic crude more consistent and reliable. Last month, Dangote refinery purchased 53% of its crude from Nigerian producers, with 47% coming from the United States. According to Edwin, the plant is currently processing ~550,000 barrels of crude per day, good for 84.6% of its maximum capacity. India is also looking to break China's dominance in rare earths supply, recently establishing cooperation agreements with mineral-rich countries in Latin America, Asi,a and Africa shortly after China further restricted the export of REE in 2024. "In the interest of developing bilateral cooperation with countries having rich mineral resources, the Ministry of Mines has entered into bilateral agreements with the governments of several countries, including Australia, Argentina, Zambia, Peru, Zimbabwe, Mozambique, Malawi, and Côte D'Ivoire, as well as international organizations such as the International Energy Agency (IEA)," India's Minister of State for Atomic Energy, Jitendra Singh, said in a written statement. Still, India has adopted a recalcitrant tone, vowing to continue buying Russia's crude, two sources previously told Reuters."These are long-term oil contracts. It is not so simple to just stop buying overnight,'' one of the sources said. A second source tried to justify India's imports of Russian crude, claiming it had helped to avert a surge in global oil prices. The source also pointed out that, unlike the situation in other heavily sanctioned countries like Iran and Venezuela, Russian crude is currently not subject to direct sanctions, and India was only buying from the embattled country because it offered cheaper oil thus shaving billions of dollars off its energy bill every year. Well, this might actually be India's official position: According to India's foreign ministry, India has maintained a "steady and time-tested partnership" with Russia. "On our energy sourcing requirements ... we look at what is available in the markets, what is there on offer, and also what is the prevailing global situation or circumstances," he said. By Alex Kimani for More Top Reads From this article on
Zawya
04-07-2025
- Business
- Zawya
Discount on Russian Urals oil shipped to India is smallest since 2022, traders say
Discounts for Russia's flagship Urals crude oil for delivery to Indian ports in August shrank to their narrowest levels since 2022 amid high demand and shrinking spot supply, three traders in the grade's market said on Friday. Narrowing discounts and lower supply of spot Russian barrels will push Indian refiners to look for alternative oil like United Arab Emirates' Murban or U.S. West Texas Intermediate (WTI) grades, traders said. The narrowing discount shows how Moscow is managing to keep its oil sales up despite Western sanctions, while its discounted oil is getting more expensive than before, though still cheaper than alternatives. Spot discounts for Urals crude narrowed to $1.70-2 per barrel to dated Brent on delivery ex-ship (DES) basis on average for cargoes arriving in India in August, from $2 to $2.50 per barrel to dated Brent on DES basis in July, the traders said. That is the narrowest discount for Urals oil cargoes to dated Brent in Indian ports since the Ukraine war broke out in 2022. Meanwhile, as the Russian oil grade is traded against Brent benchmark, its outright price has been mostly below the West's $60 per barrel price cap since April this year, allowing Western companies to provide shipping and insurance service for the barrels. Urals oil prices are supported by high demand in India and Turkey, the two largest buyers of the grade, traders said. Turkey's imports of Russia's Urals crude rose in June to their highest level since May 2024 on healthy refinery margins and seasonal demand for motor fuels, LSEG data showed. Meanwhile, Urals oil loadings are set to decline in July from June amid higher refinery runs in Russia. Russian oil supply is also set to decline in August amid a planned shutdown for maintenance of output on the Sakhalin-1 project that exports Sokol oil. India has been the largest buyer of Russian seaborne crude after Moscow diverted its energy supply away from the European Union, which imposed a ban late in 2022. Several Indian refiners that normally buy Russian oil on the spot market are not getting enough Urals oil for delivery in August, the sources said. India is exploring building three new strategic oil reserves to boost its emergency stockpile and strengthen energy security. Large volumes of Russian Urals oil are shipped to India under the deal between the country's largest private refiner, Reliance Industries, and Russian oil giant Rosneft last year, limiting the crude offered in the spot market, traders said.
Yahoo
19-06-2025
- Business
- Yahoo
India, Pakistan Brace for Oil Price Surge, Seek New Oil Suppliers
India and Pakistan are weighing their options in case the Israel-Iran conflict disrupts oil supplies through key chokepoints. While many analysts are still not convinced that Iran can actually afford to close the Strait of Hormuz, as it has threatened, it's a big gamble, and Indian refiners are making backup plans. Indian refiners are considering supplies from West African producers and other alternative energy sources as the world's second-largest importer of crude grows wary of the unfolding situation. Meanwhile, India's neighbor, Pakistan, is exploring pipeline oil supplies from the UAE and Saudi Arabia. The Strait of Hormuz handles more than 20 million barrels of crude per day, with the bulk of Middle Eastern oil passing through the channel en route to international markets. Top oil ministry officials and industry executives have been evaluating possible supply alternatives and scenarios if Hormuz is blocked. Approximately 40% of India's crude and 54% of LNG imports would be directly impacted if the Strait of Hormuz is closed. However, India's energy executives remain optimistic that Iran won't enforce a blockade, encouraged by historic precedent. A closure would almost inevitably send global oil prices soaring, alienating other oil-import-dependent countries and potentially drawing the United States into a direct confrontation with to estimates by the experts, oil prices could soar to $100 to $150 per barrel if the Strait of Hormuz is blocked. A top Indian executive has, however, reported that Indian refiners have yet to resort to panic buying of crude, which can potentially drive global prices higher. India imports~90% of its crude, with a little over 40% from the Gulf, 35% from Russia, and the rest from Africa, the United States, and other sources. That said, India will have a harder time finding alternative supplies for Middle Eastern gas, thanks to the global LNG market being much less evolved than crude markets. Further, India maintains strategic crude reserves but lacks strategic gas storage. According to India's oil ministry, the country's total crude and petroleum products storage capacity is enough to supply the country for 74 days, including the country's strategic reserves that can meet 9.5 days of demand. The situation appears to be less dire in Pakistan, although the country's top energy officials are also negotiating with international oil suppliers for alternative supplies. Pakistan can potentially store oil in its abandoned power plants, whose furnace oil storage is estimated to have capacity to hold up to a million tons of oil. There's a proposal to purchase these storage units, which the power sector planned to dispose of by selling as scrap. Pakistan's Prime Minister Shehbaz Sharif has established a committee to monitor the evolving situation and assess its impact on the country's oil market. Boosting Domestic Production India may resort to buying more Russian oil if the situation in the Middle East deteriorates. Last year, India surpassed China to become the biggest importer of Russian oil. Over the past three years, Indian refiners have been buying discounted Russian crude ever since the West imposed wide-ranging sanctions on Russian energy commodities following its invasion of Ukraine. For years, Russia's crude exports to India have been avoiding the Strait of Hormuz due to long-standing tensions between the United States and Iran. India could, however, decide to look in the opposite direction. Last year, Indian Prime Minister Narendra Modi said during a visit to Guyana that India views the South American nation as key to India's energy security, adding that he will encourage Indian companies to invest in Guyana. Guyana's Natural Resources Minister Vickram Bharrat said that his country is willing to become a crude supplier to India if Exxon Mobil (NYSE:XOM) agrees to the arrangement. Exxon is the main operator in Guyana's offshore oil production. 'We know Exxon has to do some amount of changes to their lifting schedule and logistics because their preference is for the very large vessels that can accommodate two million barrels mainly because of distance and cost,' Bharrat said. However, a longer-term solution for India would be to boost its domestic oil production. Earlier in the year, Indian financial services firm Motilal Oswal suggested that India could ramp up local production to circumvent tariffs by the Trump administration. Further, India's heavy reliance on oil imports weakens the rupee. Last year, S&P Global Commodity Insights provided estimates that India's four basins could hold up to 22 billion barrels of crude, more oil than the Permian Basin's remaining reserves. Currently, India has explored just 10% of its 3.36 million sq km wide sedimentary basin. By Alex Kimani for More Top Reads From this article on Error in retrieving data Sign in to access your portfolio Error in retrieving data Error in retrieving data Error in retrieving data Error in retrieving data
CNA
18-06-2025
- Business
- CNA
Exclusive-Indian refiners cancel palm oil orders for July-Sept as prices surge
MUMBAI :Indian refiners cancelled orders for 65,000 metric tons of crude palm oil (CPO) scheduled for delivery from July to September following a sudden surge in benchmark Malaysian prices, four trade sources told Reuters. Refiners in the world's largest palm oil importer cancelled the orders in the past three days after Malaysian palm oil futures rose more than 6 per cent, hedging their risk against the prospect of falling prices by locking in a profit. "There is a lot of volatility in the market. There was more margin in cancelling bought CPO than in importing, refining, and selling refined palm oil in the local market," said an Indian buyer who operates a refinery on the west coast and cancelled shipments for July delivery. Indian buyers made CPO purchases nearly a month ago around $1,000 to $1,030 per ton, including cost, insurance, and freight, after a rebound in palm oil production brought down prices to their lowest in more than eight months. This week, palm oil futures jumped, tracking a rally in Chicago soyoil futures after the U.S. proposed higher biofuel blending volumes. The sudden rise prompted Indian refiners to cancel contracts at between $1,050 and $1,065 per ton, making a profit of more than $30 per ton, said the sources who spoke on condition of anonymity because they were not authorised to speak to media. Buyers agreed to contract cancellations by accepting a price slightly lower than the current market rate, a decision mutually reached with sellers, said a New Delhi-based dealer with a global trading house. The CPO is being offered at about $1,070 a ton in India for July delivery, compared to $1,020 to $1,030 a month ago. Despite the cancellations, Indian imports are poised to rise in coming months after falling far below average in recent months, bringing down inventories, said Sandeep Bajoria, chief executive of Sunvin Group, a vegetable oil brokerage. India's palm oil imports hit a six-month high in May, driven by low inventories and the oil's price discount to rival soyoil and sunflower oil. Indian buying had gained momentum after India last month halved the import duty on CPO, but the cancellations have disrupted that momentum, said a Kuala Lumpur-based trader with a palm oil producing company.
Reuters
18-06-2025
- Business
- Reuters
Exclusive: Indian refiners cancel palm oil orders for July-Sept as prices surge
MUMBAI, June 18 (Reuters) - Indian refiners cancelled orders for 65,000 metric tons of crude palm oil (CPO) scheduled for delivery from July to September following a sudden surge in benchmark Malaysian prices, four trade sources told Reuters. Refiners in the world's largest palm oil importer cancelled the orders in the past three days after Malaysian palm oil futures rose more than 6%, hedging their risk against the prospect of falling prices by locking in a profit. "There is a lot of volatility in the market. There was more margin in cancelling bought CPO than in importing, refining, and selling refined palm oil in the local market," said an Indian buyer who operates a refinery on the west coast and cancelled shipments for July delivery. Indian buyers made CPO purchases nearly a month ago around $1,000 to $1,030 per ton, including cost, insurance, and freight, after a rebound in palm oil production brought down prices to their lowest in more than eight months. This week, palm oil futures jumped, tracking a rally in Chicago soyoil futures after the U.S. proposed higher biofuel blending volumes. The sudden rise prompted Indian refiners to cancel contracts at between $1,050 and $1,065 per ton, making a profit of more than $30 per ton, said the sources who spoke on condition of anonymity because they were not authorised to speak to media. Buyers agreed to contract cancellations by accepting a price slightly lower than the current market rate, a decision mutually reached with sellers, said a New Delhi-based dealer with a global trading house. The CPO is being offered at about $1,070 a ton in India for July delivery, compared to $1,020 to $1,030 a month ago. Despite the cancellations, Indian imports are poised to rise in coming months after falling far below average in recent months, bringing down inventories, said Sandeep Bajoria, chief executive of Sunvin Group, a vegetable oil brokerage. India's palm oil imports hit a six-month high in May, driven by low inventories and the oil's price discount to rival soyoil and sunflower oil. Indian buying had gained momentum after India last month halved the import duty on CPO, but the cancellations have disrupted that momentum, said a Kuala Lumpur-based trader with a palm oil producing company.
