New Delhi — Indian state-run refiner Bharat Petroleum Corp Ltd has bought 1 million barrels of sour crude from the US for its 190,000 b/d Kochi refinery, company officials said Monday -- its first ever purchase of US crude via a tender.
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The refiner bought 500,000 barrels each of Mars and Poseidon grades for delivery to the west coast of India between September 26 and October 15 through a tender that closed on July 14.
No pricing details were available.
BPCL buys around 25-30% of its overall imports of around 25 million mt/year (500,000 b/d) through tender.
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Earlier this month Indian Oil Corp, the country's largest refiner, sealed a deal to import 1.6 million barrels of crude from the US for delivery in the first week of October to its Paradip refinery on the east coast -- the first ever such purchase of US crude by one of India's state-run refiners.
The IOC deal came shortly after Indian Prime Minister Narendra Modi's visit to the US, where boosting energy cooperation between the two countries was discussed.
Analysts said IOC's move to add the US to its list of suppliers could open the way for more purchases by other Indian refiners, both state-run and private.
INDIA SCOUTS FOR CHEAP GRADES
The OPEC/non-OPEC production cuts this year have forced India to diversify its crude suppliers. India relied on OPEC for around 86% of its oil imports last year, with Iraq, Saudi Arabia, Iran and the UAE its major suppliers, oil ministry data shows.
Iraq remained India's top crude supplier in May for the second straight month as refiners increased purchases of the cheaper Basrah Heavy oil grade, which is suitable for refineries with coker units and also good for conventional refiners that produce bitumen. Saudi Arabia was the second largest supplier in the month.
For January-May, India's crude imports fell 1% year on year to 88.14 million mt, provisional data from the Petroleum Planning and Analysis cell showed. In 2016, India's total crude imports rose 9.6% year on year to 215.43 million mt.
Last week, oil minister Dharmendra Pradhan said the current state of the global oil market, characterized by low oil prices, was helping India diversify its oil supply sources, as evidenced by its recent purchase of US sour crude.
"Gone are the days of the seller, now the consumer is the king... Market security and supply security is the new normal according to our understanding," Pradhan said in Istanbul at the World Petroleum Congress.
In an oversupplied market, "it is important for the producer to understand the perspective of the consumer," Pradhan said.
India's oil demand growth will outpace China's for the third year in a row in 2017, according to Platts Analytics.
It is expected to grow about 7% to 4.13 million b/d, while Chinese demand is forecast to grow about 3% to 11.5 million b/d.
At present, India's per capita energy consumption stands at 0.55 mt of oil equivalent against the global average of 1.9 mtoe.
--Ratnajyoti Dutta, email@example.com
--Edited by Alisdair Bowles, firstname.lastname@example.org