Amid tariff heat, Indian refiners ramp up US, UAE oil purchases

Balancing act

- S DINAKAR

India's strong relations with West Asian nations and the compulsion by President Donald Trump to ramp up crude oil purchases led to Indian refiners clocking multi-year high imports from the US as well as the United Arab Emirates (UAE) in August, according to industry sources and market data.

The surge in purchase of costly, higher-quality US oil comes even as Industry Minister Piyush Goyal expressed optimism of concluding a bilateral trade agreement with the US by November. After this pact, purchase of oil and US LNG would play a key role. And, the move to source more oil from the UAE, which markets crude varieties that can substitute India's staple Russian Urals, offers a hedge to state oil companies, which are often caught in geopolitical crossfires, a senior official from a state refiner said.

The US loaded nearly 400,000 barrels per day (bpd) of predominantly light, sweet grades like WTI Midland last month, the highest since November 2022, when loadings from US ports averaged 486,000 bpd, maritime intelligence agency Kpler data showed (data as of September 5). That compares to 222,000 bpd loadings a year earlier and just 166,000 bpd in July. West Asian oil producers like Saudi Arabia and UAE are located close to India and have the volumes to offer in case of crises, said R Ramachandran, former head of refining at Bharat Petroleum.

US oil is an opportunistic buy, and typically booked two months in advance to accommodate longer transport times, he added. Russia was the biggest supplier of crude oil to India this year, accounting for around 37 per cent until August, followed by Iraq, Saudi Arabia, UAE and the US.