Indian refiners buy crude months ahead as Russia, Hormuz supply risks mount

Indian oil refiners are rushing to purchase crude months ahead of time due to increasing supply risks stemming from Russian attacks and the Hormuz Strait deadlock. Major refiners like Indian Oil Corp. and Hindustan Petroleum Corp. have already secured supplies for October and are now seeking contracts extending to November. This buying frenzy highlights growing concerns over Russian oil supplies, which have plummeted to their lowest level since May after Ukrainian attacks on Russian energy and port infrastructure.

Russia, India's largest crude supplier, now accounts for around half of state-run refiners' purchases. Middle Eastern oil deliveries are also lagging due to stalled US-Iran peace talks and uncertainty over Hormuz's reopening. Some Indian refiners, like Mangalore Refinery & Petrochemicals Ltd., have secured West African oil deliveries for October.

Major refiner Indian Oil is also planning to buy October supplies, with more tenders expected in the coming weeks. The threat of US sanctions on Russian oil and gas imports, including India's, is further driving the surge in spot crude purchases. Indian refiners typically buy spot supplies just a month or two in advance, but the current market conditions have forced them to commit to longer-term contracts.

The country is gearing up for a higher demand season with upcoming festivals in September and substantial refining expansions that will boost processing capacity by more than 500,000 barrels per day.