India's Venezuelan oil imports to hit 7-year high this October
What's the story
India is set to boost its Venezuelan oil imports this month, with shipments expected to touch about 465,000 barrels a day. This would be the highest level since December 2019. The surge in imports comes as refiners like Reliance Industries Ltd are lured by steep discounts on Venezuelan crude. This comes at a time when Russian supplies are becoming costlier and less appealing due to potential new US sanctions.
Shipment details
All cargoes headed for Reliance's Jamnagar refinery complex
All Venezuelan cargoes headed for India are destined for Sikka, the port used by Reliance's Jamnagar refinery complex.
This complex is the world's largest and can process dense, high-sulfur crude like Venezuela's Merey.
However, processing this type of crude can be challenging for some other refineries in India due to its density and sulfur content.
Supply shift
Decline in Russian crude imports
India's imports from Russia, its largest crude supplier, have been declining as prices rise.
The flagship Urals grade has reached a wartime high in the Baltic.
In September, Moscow's share in India's crude imports fell to about 35%, down from 56% in July.
This shift is partly due to fears of new punitive tariffs under a sweeping US sanctions law.
Diversification impact
Crude diversification for India
"Venezuelan crude has become an increasingly important part of India's diversification since the start of the year," said Sumit Ritolia, senior manager of modeling at Kpler.
Ritolia expects October deliveries to be closer to 350,000 barrels per day as some vessels may not discharge before month-end.
Despite its challenges, the steep discount on Venezuelan crude offsets shipping costs and makes it more appealing than Russian Urals.