Latest news with #IndianRefiners
Yahoo
12 hours ago
- Business
- Yahoo
India, Pakistan Brace for Oil Price Surge, Seek New Oil Suppliers
India and Pakistan are weighing their options in case the Israel-Iran conflict disrupts oil supplies through key chokepoints. While many analysts are still not convinced that Iran can actually afford to close the Strait of Hormuz, as it has threatened, it's a big gamble, and Indian refiners are making backup plans. Indian refiners are considering supplies from West African producers and other alternative energy sources as the world's second-largest importer of crude grows wary of the unfolding situation. Meanwhile, India's neighbor, Pakistan, is exploring pipeline oil supplies from the UAE and Saudi Arabia. The Strait of Hormuz handles more than 20 million barrels of crude per day, with the bulk of Middle Eastern oil passing through the channel en route to international markets. Top oil ministry officials and industry executives have been evaluating possible supply alternatives and scenarios if Hormuz is blocked. Approximately 40% of India's crude and 54% of LNG imports would be directly impacted if the Strait of Hormuz is closed. However, India's energy executives remain optimistic that Iran won't enforce a blockade, encouraged by historic precedent. A closure would almost inevitably send global oil prices soaring, alienating other oil-import-dependent countries and potentially drawing the United States into a direct confrontation with to estimates by the experts, oil prices could soar to $100 to $150 per barrel if the Strait of Hormuz is blocked. A top Indian executive has, however, reported that Indian refiners have yet to resort to panic buying of crude, which can potentially drive global prices higher. India imports~90% of its crude, with a little over 40% from the Gulf, 35% from Russia, and the rest from Africa, the United States, and other sources. That said, India will have a harder time finding alternative supplies for Middle Eastern gas, thanks to the global LNG market being much less evolved than crude markets. Further, India maintains strategic crude reserves but lacks strategic gas storage. According to India's oil ministry, the country's total crude and petroleum products storage capacity is enough to supply the country for 74 days, including the country's strategic reserves that can meet 9.5 days of demand. The situation appears to be less dire in Pakistan, although the country's top energy officials are also negotiating with international oil suppliers for alternative supplies. Pakistan can potentially store oil in its abandoned power plants, whose furnace oil storage is estimated to have capacity to hold up to a million tons of oil. There's a proposal to purchase these storage units, which the power sector planned to dispose of by selling as scrap. Pakistan's Prime Minister Shehbaz Sharif has established a committee to monitor the evolving situation and assess its impact on the country's oil market. Boosting Domestic Production India may resort to buying more Russian oil if the situation in the Middle East deteriorates. Last year, India surpassed China to become the biggest importer of Russian oil. Over the past three years, Indian refiners have been buying discounted Russian crude ever since the West imposed wide-ranging sanctions on Russian energy commodities following its invasion of Ukraine. For years, Russia's crude exports to India have been avoiding the Strait of Hormuz due to long-standing tensions between the United States and Iran. India could, however, decide to look in the opposite direction. Last year, Indian Prime Minister Narendra Modi said during a visit to Guyana that India views the South American nation as key to India's energy security, adding that he will encourage Indian companies to invest in Guyana. Guyana's Natural Resources Minister Vickram Bharrat said that his country is willing to become a crude supplier to India if Exxon Mobil (NYSE:XOM) agrees to the arrangement. Exxon is the main operator in Guyana's offshore oil production. 'We know Exxon has to do some amount of changes to their lifting schedule and logistics because their preference is for the very large vessels that can accommodate two million barrels mainly because of distance and cost,' Bharrat said. However, a longer-term solution for India would be to boost its domestic oil production. Earlier in the year, Indian financial services firm Motilal Oswal suggested that India could ramp up local production to circumvent tariffs by the Trump administration. Further, India's heavy reliance on oil imports weakens the rupee. Last year, S&P Global Commodity Insights provided estimates that India's four basins could hold up to 22 billion barrels of crude, more oil than the Permian Basin's remaining reserves. Currently, India has explored just 10% of its 3.36 million sq km wide sedimentary basin. By Alex Kimani for More Top Reads From this article on Error in retrieving data Sign in to access your portfolio Error in retrieving data Error in retrieving data Error in retrieving data Error in retrieving data
CNA
2 days ago
- Business
- CNA
Exclusive-Indian refiners cancel palm oil orders for July-Sept as prices surge
MUMBAI :Indian refiners cancelled orders for 65,000 metric tons of crude palm oil (CPO) scheduled for delivery from July to September following a sudden surge in benchmark Malaysian prices, four trade sources told Reuters. Refiners in the world's largest palm oil importer cancelled the orders in the past three days after Malaysian palm oil futures rose more than 6 per cent, hedging their risk against the prospect of falling prices by locking in a profit. "There is a lot of volatility in the market. There was more margin in cancelling bought CPO than in importing, refining, and selling refined palm oil in the local market," said an Indian buyer who operates a refinery on the west coast and cancelled shipments for July delivery. Indian buyers made CPO purchases nearly a month ago around $1,000 to $1,030 per ton, including cost, insurance, and freight, after a rebound in palm oil production brought down prices to their lowest in more than eight months. This week, palm oil futures jumped, tracking a rally in Chicago soyoil futures after the U.S. proposed higher biofuel blending volumes. The sudden rise prompted Indian refiners to cancel contracts at between $1,050 and $1,065 per ton, making a profit of more than $30 per ton, said the sources who spoke on condition of anonymity because they were not authorised to speak to media. Buyers agreed to contract cancellations by accepting a price slightly lower than the current market rate, a decision mutually reached with sellers, said a New Delhi-based dealer with a global trading house. The CPO is being offered at about $1,070 a ton in India for July delivery, compared to $1,020 to $1,030 a month ago. Despite the cancellations, Indian imports are poised to rise in coming months after falling far below average in recent months, bringing down inventories, said Sandeep Bajoria, chief executive of Sunvin Group, a vegetable oil brokerage. India's palm oil imports hit a six-month high in May, driven by low inventories and the oil's price discount to rival soyoil and sunflower oil. Indian buying had gained momentum after India last month halved the import duty on CPO, but the cancellations have disrupted that momentum, said a Kuala Lumpur-based trader with a palm oil producing company.
Reuters
2 days ago
- Business
- Reuters
Exclusive: Indian refiners cancel palm oil orders for July-Sept as prices surge
MUMBAI, June 18 (Reuters) - Indian refiners cancelled orders for 65,000 metric tons of crude palm oil (CPO) scheduled for delivery from July to September following a sudden surge in benchmark Malaysian prices, four trade sources told Reuters. Refiners in the world's largest palm oil importer cancelled the orders in the past three days after Malaysian palm oil futures rose more than 6%, hedging their risk against the prospect of falling prices by locking in a profit. "There is a lot of volatility in the market. There was more margin in cancelling bought CPO than in importing, refining, and selling refined palm oil in the local market," said an Indian buyer who operates a refinery on the west coast and cancelled shipments for July delivery. Indian buyers made CPO purchases nearly a month ago around $1,000 to $1,030 per ton, including cost, insurance, and freight, after a rebound in palm oil production brought down prices to their lowest in more than eight months. This week, palm oil futures jumped, tracking a rally in Chicago soyoil futures after the U.S. proposed higher biofuel blending volumes. The sudden rise prompted Indian refiners to cancel contracts at between $1,050 and $1,065 per ton, making a profit of more than $30 per ton, said the sources who spoke on condition of anonymity because they were not authorised to speak to media. Buyers agreed to contract cancellations by accepting a price slightly lower than the current market rate, a decision mutually reached with sellers, said a New Delhi-based dealer with a global trading house. The CPO is being offered at about $1,070 a ton in India for July delivery, compared to $1,020 to $1,030 a month ago. Despite the cancellations, Indian imports are poised to rise in coming months after falling far below average in recent months, bringing down inventories, said Sandeep Bajoria, chief executive of Sunvin Group, a vegetable oil brokerage. India's palm oil imports hit a six-month high in May, driven by low inventories and the oil's price discount to rival soyoil and sunflower oil. Indian buying had gained momentum after India last month halved the import duty on CPO, but the cancellations have disrupted that momentum, said a Kuala Lumpur-based trader with a palm oil producing company.
Reuters
06-06-2025
- Business
- Reuters
Russian Urals oil to India sells at narrowest discounts since 2022, traders say
MOSCOW/NEW DELHI, June 6 (Reuters) - Discounts for Russian flagship Urals crude oil for delivery to Indian ports in July hit their narrowest levels since 2022 as spot supplies have tightened, four traders involved in the market said on Friday. Narrowing discounts and tight spot supplies are nudging Indian refiners to scout for alternatives through buying tenders. Spot discounts for Urals crude narrowed to $2.25 per barrel on average for cargoes arriving in India in July, from $2.70 to $3.10 per barrel to dated Brent on delivery ex-ship (DES) basis in the previous month, the sources said. That is the narrowest discount for Urals oil cargoes sold to India since the Ukraine war broke out in 2022. India became the largest buyer of Russian seaborne crude after Moscow diverted its energy supply away from the European Union which imposed a ban. Some Indian refiners which do not have long-term supply agreements with Russian oil companies are not getting enough Urals oil in July, the sources said. India's largest private refiner, Reliance Industries ( opens new tab, locked in a term supply contract with Russian oil giant Rosneft ( opens new tab last year, which reduced the availability of Urals in the spot market, they said. Russian oil traders cited higher demand for the grade from refiners in Turkey, which has recently increased buying, boosting competition with Indian refiners over the supply. Turkey's largest oil refiner, Tupras, resumed buying Urals in April after stopping earlier this year, because of tougher U.S. sanctions on Moscow. Two of the traders also said improving refining margins globally also helped boost Russian oil demand as refiners are eager to increase crude runs. India remains the biggest buyer of Russian Urals oil by sea, with imports hitting a 10-month high in May.
Bloomberg
07-05-2025
- Business
- Bloomberg
India's Refiners Plan to Buy More Russian Oil on Spot Market
Some Indian refiners are planning to take more Russian crude from the spot market this year, with at least one processor seeking changes to contract clauses to allow greater buying flexibility. Indian Oil Corp., the nation's biggest refiner, is planning to have a quarter of its supply made up of Russian barrels, while Bharat Petroleum Corp. wants around a third of its processed crude to be from the OPEC+ producer. Company executives made the remarks on recent calls for quarterly earnings.
