US, Saudi vie for share of India’s crude import pie

The United States (US) and the Gulf, led by Saudi Arabia, are in competition for a larger share in the import of crude oil by India, the world’s fastest-growing oil consumer, amid growing pressure by Washington on India to stop purchases from Russia, its largest supplier.

- S DINAKAR

Crude oil from the US is turning competitive owing to a global oversupply, running Mideast crude grades close and making it justifiable for Indian refiners to increase purchases for reasons of economics rather than political pressures, according to senior industry sources, pricing documents, and the shipping data.

In response, Saudi Arabia, India’s third-biggest supplier and a bellwether to other Mideast grades, has moderated premiums, cutting official selling prices (OSPs) in Asia for November arrivals for its “Arab Medium” and “Arab Heavy” crudes by 30 cents a barrel, and keeping levels flat for its other crude grades compared to October.

Indian refineries are geared to process more medium, sour grades and less of the light, sweet varieties.

“The supply glut has been confirmed by recent pricing actions on the part of major producers,” said Johannes Raubail, an analyst at Kpler. “Following the lead of Saudi Aramco, both Iraq and Kuwait have reduced their OSPs across all regions, signalling that ample supply is readily available.”