Oil shipments to India face delivery hurdles on Mideast snarls

Oil shipments to India have faced delivery challenges due to escalating conflict in the Middle East, forcing refiners to seek more expensive alternative sources. State-owned Bharat Petroleum Corp. had to arrange four Gulf shipments that were late in August, according to sources, who preferred not to be named. Indian Oil Corp. has also experienced disruptions in delivery schedules.

The sudden issues have prompted local refiners to seek alternative crude supplies quickly, leading to a surge in purchase tenders and cargo solicitations, said other sources familiar with the trades. India is the world's third-largest oil consumer, and the Middle East crisis continues to complicate matters for processors and escalate costs.

Refiners in the South Asian nation now face an additional hurdle as oil deliveries from Russia, a key supplier, have also been disrupted due to Ukrainian attacks. While India is geographically close to the Middle East, it typically relies on shipments through the Strait of Hormuz, a crucial chokepoint linking the Persian Gulf to global markets, which is disputed between the US and Iran.

BPCL, one of the refiners, had four missed Gulf cargoes, including two from the UAE, one from Saudi Arabia, and one from Kuwait. Despite the recent scramble, refiners are now confident with orders through October, with many arranging November deliveries as well. As the Russian-Ukraine war escalates, Russian oil prices have risen, with Urals priced at a premium of $2 per barrel compared to a recent discount.

Both BPCL and IOC did not respond to requests for comment, which must be in English, full sentences, and adhering to community guidelines.