India to cut down oil imports from Saudi Arabia

Several Indian corporations are preparing to lift about 10.8 million barrels in May including Indian Oil Corp, Bharat Petroleum Corp, Hindustan Petroleum Corp etc.

New Delhi:  In an escalating standoff with Riyadh following Organization of Petroleum Exporting Countries (OPEC)’s decision to ignore calls from New Delhi, the Indian state refiners are now planning to cut oil imports from Saudi Arabia by a quarter in May.

Reuters reported that India’s oil minister Dharmendra Pradhan has repeatedly called on OPEC and its allies to ease supply curb and has blamed Saudi’s voluntary cuts for contributing to a spike in global oil prices.

Several Indian corporations are preparing to lift about 10.8 million barrels in May including Indian Oil Corp, Bharat Petroleum Corp, Hindustan Petroleum Corp and Mangalore Refinery and Petrochemicals Ltd according to Reuters.

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Being the world’s third-largest oil importer and consumer of oil, India imports 80% of its oil needs and relies heavily on the Middle East. India’s 60% of 5 million barrels per day(BPD) refining capacity is controlled by the state refiners, who together import an average of 14.7-14.8 million barrels of Saudi oil in a month.

Saudi energy minister Prince Abdulaziz bin Salman responding to Pradhan’s request suggested, India dip into strategic reserves filled with cheaper oil bought last year. Reuters said OPEC decided this month to extend cuts into April.

India’s oil ministry responded by asking refiners to speed up their diversification of crude sources and reduce reliance on the Middle East.

In February, the United States emerged as the second-biggest supplier to India after Iraq, and Saudi which has been one of India’s top two suppliers have slipped to No.4.

 “The Oil companies take their own decision regarding the purchase of crude,” the oil ministry told Reuters.

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