NEW DELHI/SINGAPORE - Indian Oil Corp has bought 6 million barrels of U.S. crude for delivery in November to January, a company official said, as the nation's top refiner scouts for alternatives to Iranian oil ahead of impending U.S. sanctions.
This was the company's first purchase through a mini-term tender to buy U.S. oil, IOC's Director of Finance A.K. Sharma said on Wednesday.
IOC will buy 2 million barrels of Mars oil in November, a combination cargo containing 1 million barrels each of Eagle Ford and Mars in December and 2 million barrels of Louisiana Light Sweet (LLS) in January, Sharma said.
Sharma did not identify the sellers or the price.
India has asked refiners to prepare for a drastic cut or even zero imports from Iran after the United States withdrew from the 2015 nuclear deal and announced a renewal of sanctions on Tehran.
While some sanctions started from Aug. 6, others, most notably in the petroleum sector, will be applied from Nov. 4.
Lower purchases by Chinese buyers is also aiding the flow of U.S. oil to India. China's Unipec has suspended U.S. oil imports due to a growing trade spat between Washington and Beijing.
In addition, U.S. crude futures' discount to Brent remains historically wide at $6.27 a barrel, encouraging U.S. oil exports.
"We think India will continue to buy U.S. oil given the strength in U.S production and the Indian market can emerge as a reliable buyer of U.S. oil," said Sri Paravaikkarasu, head of East of Suez Oil at consultancy FGE.