Indian Refiners Diversify Amid Hormuz Bottleneck

Indian refiners are scrambling to replace lost crude oil supply from the Middle East due to the Iran war, which has choked term supplies at the Strait of Hormuz and Bab el-Mandeb. As a result, state-controlled Mangalore Refinery and Petrochemicals Limited (MRPL) has acquired about 1 million barrels of crude oil from Oman via a tender, paying a premium of $3 per barrel to Dated Brent.

MRPL's purchase is part of a larger trend in which several Indian refiners have recently bought crude from Oman and West Africa. State-run Indian Oil Corporation (IOC), the largest refiner by capacity in India, has bought 4 million barrels of West African crude, including Nemba, Saxi Batuque, and Clov grades from Angola, and Congo's Djeno crude.

Indian Oil also acquired 2 million barrels of Nigerian crude from Glencore via a tender. These purchases are part of India's efforts to offset the loss of supply from the Middle East with deliveries from producers farther away. The country has significantly boosted its imports of Russian crude in recent months, but Indian refiners are looking for alternative sources that do not need to transit any of the chokepoints in the Middle East.