The Indian company Reliance Industries Ltd. is seeking a way to resell part of the Middle Eastern crude oil it purchased last month to replace Russian oil in light of Western sanctions.
According to trade sources, Reliance halted purchases from Russia last month after the United States imposed sanctions on its main supplier – Rosneft – and has drawn at least 12 million barrels of spot crude from the Middle East and the Americas.
Sources also emphasize that the company, which previously had a long-term agreement for about 500,000 barrels per day with Rosneft, stated that it would comply with the sanctions while preserving its ties with existing suppliers.
Substitutes for Russian supply
To cover the shortfall from Russian crude, Reliance bought 1 million barrels of Murban from Abu Dhabi, 2 million barrels of Upper Zakum and 500,000 barrels of Qatar Land. Also purchased were 3 million barrels of Al-Shaheen and Khafji crude from Qatar, 2 million barrels of Basrah Medium from Iraq, 2 million barrels of Brazilian oil Tupi and Sapi, and also 2 million barrels of U.S. West Texas Intermediate. Traders expect the total volume of spot purchases to reach around 16 million barrels.
Sources also note that Reliance offered to resell some of these cargoes. It is reported that the company sold 1 million barrels of Basra Medium, loaded in December, to a Greek petrochemical plant, likely earning a profit from the resale. It is not disclosed how many other cargoes were sold.
Analysts indicate that reselling Middle Eastern crude could be complicated by high transportation costs and the current price environment in the market.
In the context of overall demand, India continues to buy Russian oil: one of the leading refiners – Indian Oil Corp – has purchased five cargoes of Russian oil since December, resuming supplies under U.S. pressure.