IOC buys 7M barrels of US, Mideast crude post-Russia pause
What's the story
Indian Oil Corporation (IOC), the country's largest refiner, has made a major purchase of crude oil. The company has bought seven million barrels of September-arrival crude from the United States, Canada, and the Middle East through a tender, according to Reuters. The move comes after IOC's decision to pause purchases of Russian crude due to narrowing discounts.
Purchase breakdown
IOC's tender closed on Friday
The crude oil procured by IOC includes 4.5 million barrels of US crude, 500,000 barrels of Canada's Western Canadian Select (WCS), and two million barrels of Das oil from Abu Dhabi. The purchases were made as part of a tender that closed on Friday. P66 and Equinor will each supply one million barrels of US West Texas Intermediate Midland crude while Mercuria will supply two million barrels of the same grade.
Supplier commitments
Prices for these deals not disclosed yet
In IOC's tender, Vitol will deliver one million barrels of WTI Midland and WCS. Trafigura will supply two million barrels of Das oil. The prices for these deals have not been disclosed yet. This massive spot crude purchase by IOC comes after the arbitrage window for US crude to Asia opened.
Market shift
IOC aims to replace Russian barrels
The higher-than-normal purchases by IOC are partly aimed at replacing Russian barrels. India, the world's third-largest oil importer, is the biggest buyer of seaborne Russian crude. However, Indian state refiners including IOC, Hindustan Petroleum Corp, Bharat Petroleum Corp, and Mangalore Refinery Petrochemical Ltd have not sought Russian crude in the past week or so.