India’s state-run refiner Bharat Petroleum Corp Ltd (BPCL) bought one million barrels of US crude oil grade, the West Texas Intermediate (WTI) Midland sweet crude, for delivery in October, making it BPCL’s first purchase of the sweet variety from the US.
Energy news provider, Platts, quoted trade and oil ministry sources that BPCL bought the cargo via a tender floated last month at a cheaper price. Last week, BPCL also bought 1 million barrels of crude via a spot tender.
During the first half of July, BPCL bought 500,000 barrels of varieties of medium-to-high-sulfur crude for delivery to its refineries.
Another India state-run refinery, Hindustan Petroleum Corp. Ltd. (HPCL) also has plans to import US sweet crude in the next few months for its refineries. HPCL’s two refineries in Mumbai and Vizag can take up to 2 million barrels/month of US crude.
The deal made IOC the first state-run refinery in India to buy US crude.
It could also deal a blow to Nigeria whose number one crude oil export destination is India.
India’s IOC buys some 8 million tons of crude oil from Nigeria; most of it light sweet and they are bought from spot markets where prices are subject to extreme volatility.
The recent OPEC/non-OPEC cuts have meant that India had to diversify its crude suppliers.