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India Boosts Saudi Crude Oil Imports Following Price Cuts

Large Indian state-owned refiners are looking to book additional term crude supplies from Saudi Arabia for February after the world’s top crude exporter slashed its official selling prices to Asia to the lowest to benchmarks in more than two years, sources at the Indian companies have told Reuters.

India is also seeking additional term crude deliveries from West African producers Angola and Nigeria, as its imports of Russian crude oil fell in December to an 11-month low, according to Reuters’ sources.   

State refiners Indian Oil Corporation (IOL) and Bharat Petroleum Corporation Limited (BPCL) are looking to book extra 1 million barrels of oil each from Saudi Arabia’s oil giant Aramco for February, per the sources.  

This weekend, Aramco reduced the price of its crude oil for February delivery for all buyers rather than just Asian ones as it has done before. The cut for Asian importers was the deepest, however, at $2 per barrel for all grades that Saudi Arabia exports. The price of Arab Light, Saudi Arabia’s flagship crude grade, to Asia for February was slashed by $2 per barrel to a premium of $1.50 per barrel over the Oman/Dubai prices, off which Middle Eastern producers price their crude loading for Asia. That’s the lowest premium over Oman/Dubai for 27 months—since November 2021.  

India is looking at more Saudi and West Africa supplies amid lower imports of crude from Russia, which is now its top crude supplier, having toppled Iraq and the Saudis from the top two spots over the past year. 

The tougher enforcement of the G7 sanctions and related payment issues have been holding up Indian purchases of some cargoes of Russian crude oil, with tankers previously headed to India now turning back eastwards. 

Days after the reports of payment problems emerged, Indian Oil Minister Hardeep Singh Puri said that India’s lower imports of Russian crude oil in recent weeks were the result of unattractive discounts, not because of payment issues amid tougher U.S. sanctions on Russia’s exports.   

“There is no payment problem,” Puri told a briefing in New Delhi last week, as quoted by Bloomberg


By Tsvetana Paraskova for Oilprice.com

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