Indian Oil Corporation Shifts Strategy, Buys 2 Million Barrels of Nigerian Crude
Top Indian refiner Indian Oil Corp has made a strategic shift in its latest tender, skipping U.S. oil purchases entirely and instead acquiring 2 million barrels of West African crude and 1 million barrels of Middle Eastern grade.
The state refiner purchased one million barrels each of Nigerian oil grades Agbami and Usan from French oil major TotalEnergy, alongside another million barrels of Abu Dhabi’s Das crude from Shell. The Nigerian oil was bought on free-on-board basis while Das was purchased on a delivered basis for arrival at Indian ports in late October-early November.
This marks a notable change from IOC’s previous tender, where the company bought 5 million barrels of U.S. West Texas Intermediate. In recent months, Indian refiners had taken advantage of favorable arbitrage windows to increase their U.S. oil purchases via tender, partly to help reduce India’s massive trade surplus with the U.S.
However, the landed cost for U.S. crude proved high compared to other grades, despite the front-month Brent-WTI differential being about $4 per barrel. The shift comes as oil prices fell Friday following a weak jobs report that dimmed the outlook for energy demand in the U.S.
The move by Indian Oil Corp coincides with Nigeria’s efforts to revitalize its upstream sector. The country recently signed a production-sharing contract with TotalEnergies and local firm South Atlantic Petroleum for two offshore blocks, covering petroleum prospecting licenses 2000 and 2001 in the Niger Delta Basin. TotalEnergies holds an 80% contractor interest while Sapetro holds 20%.
Oil markets faced headwinds as Brent crude futures fell $1.88, or 2.81%, to $65.11 a barrel, while U.S. West Texas Intermediate crude dropped $1.94, or 3.06%, to $61.54. U.S. crude inventories rose 2.4 million barrels last week, contrary to analyst expectations of a decline.
Sources: independent.ng, orientalnewsng.com
