Oil market participants are intently monitoring India’s immediate and long-term acquisitions of crude oil. (AI image)
As US President Donald Trump’s sanctions on Russian oil firms come into effect later this week, Indian refineries are already looking at the Middle-East for their crude oil supply. An increase in oil tanker bookings for Middle East-India routes indicates potential growth in crude imports soon, as sanctions on Russian producers force India to explore dependable supply alternatives. Oil market participants are intently monitoring India’s immediate and long-term acquisitions of crude oil from sources other than Russia, seeking to understand the nation’s strategy before November 21, when trade restrictions against Rosneft PJSC and Lukoil PJSC become operational.
India eyes crude oil from Middle-East
According to shipbroker data quoted in a Bloomberg report, approximately 12 tankers have secured charters this week to transport crude from Saudi Arabia, Kuwait, Iraq and the United Arab Emirates to Indian refineries across the Arabian Sea. This is a notable increase from the previous month’s four recorded bookings, highlighting a distinct change in India’s immediate crude oil procurement patterns.Also read: Now unjustified! Why Trump should withdraw 25% Russian oil tariffs on India with immediate effect – explainedThe current bookings include Very Large Crude Carriers (VLCCs) and Suezmax vessels, with loading dates set from late November through December. Shipbrokers report that Indian purchasers continue to seek additional vessels for comparable routes, indicating that refineries are preparing for potential supply constraints as Russian supplies diminish.Whilst visible vessel reservations may not show the complete scenario – as several charters are arranged privately – they nevertheless provide crucial information about wider procurement trends and offer insight into an otherwise non-transparent trading landscape. The increased vessel bookings are also driving shipping costs upward. The daily hire rates for transporting Middle Eastern crude via VLCCs to Asian destinations are currently approaching their highest level in five years, indicating reduced vessel availability and intensified competition for maritime transport capacity.India’s seven major refiners include five companies, with Reliance Industries Ltd. among them, who plan to stop Russian crude procurement after this week’s wind-down period concludes, according to the Bloomberg report. The remaining firms are likely to continue assessing non-sanctioned sellers’ cargo offerings, albeit at reduced quantities. Recent tendering activities indicate a slight increase in India’s crude acquisitions compared to typical patterns.Also Read | Asian buyers, including India, will increase their oil purchases from Saudi Aramco in December following a reduction in Russian crude imports. According to sources involved in the transactions, customers across India, Japan, South Korea and Taiwan have requested an additional 18-20 million barrels for December delivery compared to the current month, attracted by Saudi’s competitive pricing. Chinese purchases, however, decreased by approximately four million barrels.
