India’s refiners are turning to spot oil from Africa and North America as long-term suppliers in the Middle East cut output and as demand for gasoline jumps amid the Covid-19 pandemic.
Spot crude imports into the world’s third-largest oil market will rise by 10% to 15% this year from 2020, according to industry consultant FGE. The increased purchases are coming as India’s top suppliers, including Saudi Arabia and Iraq, curtail output as part of the OPEC+ pact.
The shift underscores how other producers are benefiting from the cuts as consumption returns in markets like India. It’s been especially good to exporters like the U.S. and Nigeria, whose crude produces more gasoline that’s in high demand as the pandemic pushes people to private cars instead of public transport.
“The pullback from traditional term suppliers came when refiners maximized throughput to align with the robust domestic demand recovery,” said Senthil Kumaran, FGE’s head of South Asia oil. “They were forced to scramble for spot supplies to bridge the shortfall.”
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