Government analysts plan to reduce oil imports to Saudi Arabia by about a quarter of May, which will escalate into action against Riyadh following OPEC’s decision to ignore calls from New Delhi to help the global economy with higher supply. negotiators say the move is part of the government’s drive to reduce dependence on raw people in the Middle East.
The Indian Oil Corporation, Barat Petroleum, Hindustan Petroleum, Mangalore Refinery and Petrochemicals Ltd are set to launch an estimated 10.8 million barrels in May, sources said on condition of anonymity.
The State Refiners, which control about 60% of the five million barrels per day (bpd) for refining power, have combined to import 14.7-14.8 million barrels of Saudi oil per month, sources said.
India, the world’s largest importer and consumer, imports more than 80% of its oil needs and relies heavily on the Middle East.
Strike with rising oil prices, Petroleum Minister Dharmendra Pradhan has repeatedly called on the Organization of Petroleum Exporting Countries (OPEC) and its partners, known as OPEC +, to reduce supply restrictions.
He blamed Saudi voluntary cuts for contributing to rising global oil prices.
OPEC + decided this month to extend more cuts to April. In response to Mr Pradhan’s request, Saudi energy minister Prince Abdulaziz bin Salman suggested that India immerse itself in stockpiles of cheap oil purchased last year.
The department has responded by asking analysts to accelerate their diversity of raw sources and reduce reliance on the Middle East.
The refiners could not reduce oil imports in April from Saudi Arabia as proposals were filed before the OPEC + decision in early March, sources said, adding that the May plans were first and the last May proposals would be known in early April.
Saudi Arabia reduced oil in April for some Asian refiners but maintained the average monthly amount for Indian refiners. The State, however, has denied the need for Indian companies to acquire additional goods.
The Middle East’s share of India’s total imports has already dropped to 22 months in February.
In February, the United States emerged as India’s second-largest supplier after Iraq, while Saudi Arabia, which has been one of India’s two leading suppliers, dropped to No. 1. 4 for the first time since at least January 2006.
Two analysts – IOC and MRPL – also issued tenders demanding oil delivery in May.
“Oil companies are making their own decisions about buying impurities,” the Department of Environmental Affairs told Reuters. State analysts did not respond to Reuters’s request for comment.