For the first time, state-run refiner Indian Oil Corporation (IOC) has bought 4 million barrels of Norway's Johan Sverdrup crude via a tender as it increases speed diversification of crude imports, two trade sources told Reuters on Monday.
IOC will take delivery of 2 million barrels each of the North Sea crude in May and June, one of the sources confirmed. Additional details on the trades were needed to be clear.
The step followed the Indian government's call to cut reliance on crude from the Middle East in an escalating stand-off between India, the world's third-largest crude importer, and Saudi Arabia, the de-facto leader of the Organization of Petroleum Exporting Countries (OPEC).
India criticizes that long-running OPEC production cuts have caused uncertainty for customers and led to a surge in prices, creating financial
challenges for a country where heavily-taxed retail fuel prices lately touched record highs, threatening an economic recovery.
Indian state refiners - top refiner IOC, Bharat Petroleum Corp, Hindustan Petroleum Corp and Mangalore Refinery and Petrochemicals Ltd - are setting up to cut oil imports from Saudi Arabia by about a quarter in May, as per a report by Reuters.
Oil from Johan Sverdrup, the major North Sea discovery in more than three decades, started to flow to Asia's top oil importers in late 2019, with India's Reliance Industries Ltd among its first takers.
Though the grade has got popularity among Chinese independent refineries, it has rarely been supplied to India, trade flows data on Refinitiv Eikon show.
India previous discharged a 1-million-barrel cargo of Johan Sverdrup crude in September 2020, the data show.
Chinese refiners have reduced crude purchases in the spot market amid seasonal refinery maintenance and a large influx of Iranian oil, pressuring global oil sellers.
Indian refiners, in the meantime, are looking at crude from the United States, West Africa, South America and the Mediterranean as alternative options as they diversify away from Middle eastern oil, trade sources say.
Another state refiner, BPCL, bought three million barrels of US light sweet grades, including West Texas Intermediate Midland and Eagle Ford, for arrival in May, a trade source stated.
