NEW DELHI/SINGAPORE: Indian Oil Corp (IOC), the country’s top refiner, is seeking to buy up to 24 million barrels of US oil for delivery between October 2020 and March 2021, tender documents showed, as part of its efforts to diversify supply.
The move will help IOC to hedge against unpredictable pricing moves by Middle East producers, a source familiar with the matter said, speaking on condition of anonymity.
IOC is requesting 2 million barrels of US crude per month with the option of an additional 2 million barrels per month for discharge at the Paradip port on the east coast, the documents showed.
Asian refiners had anticipated state oil giant Saudi Aramco would raise July crude prices, despite weak refining margins, to track a jump in Middle East benchmarks, but the increase to Asian buyers was more than expected.
The producer on Sunday hiked the selling prices for its crude grades to all destinations for July, a day after OPEC, led by Riyadh, and its allies agreed to extend record output cuts to the end of July.
For Asian buyers, Aramco raised the July official selling price (OSP) for its Arab light crude to Asia to plus $0.20 a barrel, up $6.10 from June.Other Middle East producers will likely follow Aramco in increasing OSPs, trade and refinery sources told Reuters on Monday.
Higher OSPs would push companies to diversify oil supply from the Middle East to other regions, the source said, adding IOC wants to increase its annual intake of US oil in this fiscal year.
The tenders will close on June 12 with validity on the same date.Among the grades sought are Eagleford-45, Light Louisiana Sweet, Mars Blend, Poseidon, Thunder Horse and WTI Midland.