By Nidhi Verma
NEW DELHI (Reuters) – Middlemen supplying Russian oil are not offering cargoes due to new U.S. sanctions targeting Russian producers, tankers and insurers, according to the finance chief at Indian refiner Bharat Petroleum (NSE:BPCL).
The company and other state refiners – Indian Oil Corp, BPCL, Hindustan Petroleum (NSE:HPCL) and Mangalore Refinery and Petrochemicals buy Russian oil in the spot market, mainly from traders and the delays are forcing them to look for alternatives.
“We have not received any new offers for the March window (delivery). Traders are asking us to wait. We are waiting to get offers,” Vetsa Ramakrishna Gupta told Reuters on Wednesday.
“We are not expecting the similar number of cargoes what we used to get in the month of December and January,” Gupta said.
Traders begin offering cargo by 15th of every month for lifting in the following month.
The refiner on average gets 16-17 cargoes of Russian oil in a month, which cover about 35% of its needs. Like other Indian refiners it saw a drop in January, coming three cargoes short, and now faces a further drop in supplies in March.
To make up for the shortfall, Indian refiners have floated tenders for oil imports and are purchasing grades such as Abu Dhabi’s Murban grade.
BPCL has also floated an annual tender seeking supply of 1 million barrels of Murban each month for a year.
Gupta said his company could float a mini term tender in March seeking U.S. oil cargoes for up to six months, as higher premiums on Middle Eastern spot oil have made U.S. crude more attractive.
India is expected to increase its purchases of U.S. oil and gas after U.S. President Donald Trump’s announcement that his administration will seek to maximise U.S. oil and gas production.
This post is originally published on INVESTING.
