Amid the Saudi Arabia raising the official selling price (OSP) for crude oil to record high for Asia, some Indian refiners have reportedly reduced oil purchases from the Kingdom and have opted for cheaper Russian crude oil for May.
The rising crude prices are adversely impacting India, which is the world’s third biggest oil importer and consumer.
Saudi state oil producer Saudi Aramco, the world’s top crude oil exporter, has raised crude prices for all regions, with those to Asia hitting all-time highs, reports Economic Times.
India imports bulk of its oil requirement from the Middel East, with Iraq and Saudi among the top supplier to New Delhi.
Now, in the wake of the rising crude prices, at least two Indian refiners have turned to Russia for cheaper crude for the month of May.
The reductions in May by the Indian refiners would be marginal because they have to lift the amount they have committed to under annual contracts, according to the source quoted in a Reuters report.
Indian refiners have bought at least 16 million barrels of cheaper Russian oil for May loading on a delivered basis, similar to purchases for the whole of 2021, according to Reuters calculations.
The companies have mostly bought Russian Urals, a grade similar in quality to medium sour crude produced in the Middle East and West Africa, mainly Angola.