India’s largest refiners Indian Oil and Bharat Petroleum are considering increasing their purchases of Saudi oil in February after Saudi Arabia cut the price of its main export product, Arab Light, to its lowest level since November 2020. This was reported by Reuters.
According to the article, the Saudi Arabian Oil Company (Saudi Aramco) set the price of Arab Light oil for February deliveries at $1.8 per barrel below the Oman/Dubai benchmark, the lowest price since November 2020.
Indian Oil and Bharat Petroleum are exploring the possibility of purchasing an additional 1 million barrels of oil per month from Saudi Aramco in the wake of such a sharp price drop. Saudi Aramco typically notifies Asian buyers of the volume of the following month’s oil supplies by the 10th day of the current month, the publication states.
The main reason why Indian companies want to increase their imports of Saudi oil is the difficulty in paying for Russian oil supplies due to the sanctions imposed by the West after the start of the special operation against Ukraine.
India has been actively increasing its purchases of cheap Russian oil since last summer, which has led to Russia becoming India’s largest supplier of raw materials, surpassing traditional leaders Saudi Arabia and Iraq.
However, after the West introduced a ceiling price of $60 per barrel for Russian oil and tightened payment rules, it became difficult for India to pay for supplies from Russia. As a result, Russia’s oil imports fell to the lowest level in the last 11 months in December.
Indian Oil had previously purchased 6-7 batches of Russian Sokol light oil per month under its contract with Rosneft, but is currently experiencing difficulties in these supplies. The agency writes that the company may also increase oil purchases from Nigeria and Angola under long-term contracts to compensate for the loss of volume in Russia.
Iraq at the beginning of January plans Completely stop imports of petroleum products.
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