Page 6 - AsianOil Week 33 2021

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BPCL steps up US crude imports
PROJECTS & COMPANIES
INDIA’S state-run Bharat Petroleum Corpora- tion Ltd (BPCL) is increasing its purchases of US crude oil to meet rising domestic fuel demand, Reuters reported this week.
The country’s second largest refiner has purchased about 9mn barrels of US crude for delivery in August, September and October, the newswire said on August 17, citing two unnamed sources. Commodities trader Vitol is understood to have sold 1mn barrels of US crude to BPCL for October delivery.
BPCL purchased 17mn barrels of US crude in the first seven months of the year, the sources said. Attractive pricing for the WTI Midland grade, with rates approaching their lowest level in a year earlier this month, is believed to have influenced BPCL’s purchases strategy.
Domestic fuel demand, meanwhile, has picked in the wake of the country’s various pan- demic restrictions having been eased in recent months. Fuel consumption climbed 7.9% year on year in June to 16.83mn, according to Petro- leum Planning and Analysis Cell (PPAC) data published on August 9.
One of Reuters’ sources said India’s largest refiner state-run – Indian Oil Corp. (IOC) – had
been buying US spot cargoes since April. How- ever, the downstream giant is now understood to be looking for West African barrels.
Although average US oil exports slipped to 2.4mn barrels per day in the week to August 6 – their lowest level since February 2019 – mar- ket observers remain upbeat about the sector’s short-term prospects.
“We are positive that the ongoing revival of US crude to Asia should continue in the upcom- ing weeks,” Reuters quoted JBC Energy as saying in a note this week.
India has been striving to diversify its oil import basket this year in the wake of crude pro- duction curbs imposed by OPEC+ to support international prices.
India had a very public disagreement with Saudi Arabia in the opening months of this year, with the then Minister of Petroleum and Natural Gas Dhar- mendra Pradhan repeatedly criticising OPEC+’s unwillingness to deliver oil price stability at a time when the global economy was trying to find its feet.
The official repeatedly warned that India would diversify its imports as well as speed up its adoption of alternative energy supplies if pro- duction cuts were not eased.™
India reportedly frees up SPR space
POLICY
INDIA is reportedly selling down some of its strategic petroleum reserves (SPR) ahead of the planned commercialisation of the storage facilities.
Indian Strategic Petroleum Reserves Ltd (ISPRL) is in the process of gradually selling 8mn barrels of oil to state-run Mangalore Refin- ery and Petrochemicals Ltd (MRPL) and Hin- dustan Petroleum Corporation Ltd (HPCL), Reuters said on August 17, citing three unnamed sources.
The SPR operator is understood to have started selling about 5.5mn barrels of oil imported from the United Arab Emirates (UAE) to MRPL from its facility in Mangalore, which has a 1.5mn tonne (11mn barrel) capacity. ISPRL also manages a 2.5mn tonne (18.33mn
barrel) facility at Padur as well as a 1.33mn tonne (9.75mn barrel) complex at Visakhapatnam.
ISPRL will sell the oil at a discount to the offi- cial selling prices (OSPs) set by producer countries, the newswire added. The move is being driven by a desire to free up storage space ahead of the planned commercialisation of the country’s SPR.
ISPRL wants to empty the UAE crude by February because MRPL wants to store a dif- ferent grade, two of Reuters’ sources said. They added that MRPL intended to lease 300,000 tonnes of space at the Mangalore facility, while HPCL wanted to lease the same amount from the Visakhapatnam storage.
Once the sell off at Mangalore has been wrapped up, ISPRL is expected to sell down of its stockpile at Padur.
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