Indian refiners are preparing to receive shipments of Venezuelan crude oil from Vitol, following that Indian Oil Corporation (IOC) and Mangalore Refinery and Petrochemicals (MRPL) have secured 2 million barrels of Venezuelan crude for delivery in November. This move highlights a significant trend as India increases its imports from Venezuela, capitalizing on a U.S. Treasury allowance that permits certain transactions despite ongoing sanctions against President Nicolas Maduro’s government.
IOC, India’s largest refiner, is slated to receive 1.2 million barrels, while MRPL will import 800,000 barrels of the heavy Merey crude. Notably, MRPL’s decision to acquire this grade of oil is atypical, suggesting a strategic shift among Indian refiners to adapt to current market conditions and optimize processing needs while managing costs. Neither Vitol, IOC, nor MRPL has provided specific comments regarding the deal. Furthermore, it remains uncertain whether Vitol possesses a license for this transaction or if it purchased the crude from a licensed source for resale.
This is not the first instance of India rapidly securing Venezuelan crude. Earlier this year, Reliance Industries, the nation’s largest private refiner, resumed its Venezuelan oil purchases after obtaining a U.S. license. This arrangement involves a swap of heavy naphtha, a crucial diluent, for Venezuelan crude. As long as these exemptions remain in effect, Indian refiners are likely to continue sourcing Venezuelan oil to maintain a consistent supply for their refineries, which are primarily designed for processing heavier crude grades.
For India, the world’s third-largest crude oil importer, Venezuelan crude represents a strategic opportunity to enhance the efficiency of its refining operations. Most Indian refiners have resumed acquiring Venezuelan crude oil through intermediaries, and Reliance was exploring discussions for direct sales with Venezuela’s state-owned oil company, PDVSA, back in March.
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