An oil ministry spokesman didn’t immediately reply to an email seeking comment. Separately, IOC, BPCL and HPCL didn’t reply to messages from Bloomberg seeking comment.
Beyond term contracts, oil producers and refiners typically deal with purchases in short-run cycles, with cargoes booked about one-and-a-half to two months ahead of loading. That planned-ahead pattern allows users to ensure they have enough on hand to meet their requirements.
While overall purchases of October-loading Urals by India’s refiners are unlikely to drop to zero, a dip could prompt a rush for other grades, with US, Middle Eastern and African cargoes as alternatives, said traders, who buy and sell across the region. Discussions for October cargoes have not yet started, though traders foresee deeper Russian discounts and more offers to China, which doesn’t typically take much of the variety.
In late-July, purchases of September-loading Urals concluded with India taking fewer barrels due to pricey offers. Since then, state-owned refiners have issued a slew of tenders, soaking up spot cargoes from other regions. Private processors Reliance Industries Ltd. and Nayara Energy Ltd., meanwhile, have been quiet, with the latter grappling with a steep drop in run rates following sanctions imposed by the European Union.
Cargoes of Urals — Russia’s benchmark crude grade from the west of the country — for August- and September-loading are likely to be delivered as planned, unless New Delhi advises otherwise, the people said. In recent days, tankers have offloaded some cargoes at Indian ports, albeit with some slight delays. At its peak, India imported more than 2 million barrels a day of Russian oil, up from almost zero purchases before the Ukraine war.
“There would be some operational disruptions for a period, but the crude supply-demand would balance out,” said R. Ramachandran, former director of refineries at Bharat Petroleum. If Russian supplies are more difficult, “Middle East crudes — with the geographical advantages and a wide range of quality will be a prime substitute, especially from Saudi and Iraq,” he said.
