India’s Recent Oil Purchases Reflect Strategic Energy Goals
Indian Oil Corporation (IOC) has made significant oil purchases from West Africa and the Middle East, showcasing a strategic approach that balances geopolitical concerns and energy security objectives. Trade sources revealed that IOC bought two million barrels of West African crude and one million barrels of Middle Eastern grade, continuing a trend that aligns with India’s realistic energy security goals.
The recent acquisitions included one million barrels each of Nigeria’s Agbami and Usan oil grades from TotalEnergies, along with one million barrels of Abu Dhabi’s Das crude from Shell. The Nigerian cargoes were acquired free-on-board (FOB), while the Das crude was purchased delivered, with shipments expected to reach Indian ports between late October and early November.
This move highlights India’s growing preference for West African oil, as evidenced by the decision to forgo US oil in the latest transaction. Just a week prior, IOC had purchased five million barrels of US West Texas Intermediate (WTI). This shift underscores India’s evolving oil procurement strategies and its willingness to explore diverse sources to meet its energy needs.
Furthermore, this shift in oil trade dynamics is particularly noteworthy considering India’s previous reliance on cheap Russian oil. Following Russia’s invasion of Ukraine, India capitalized on discounted oil prices to shield itself from global energy price fluctuations and navigate Western sanctions. However, recent efforts by the US to curtail Moscow’s energy revenues have prompted Indian refiners to reduce imports from Russia, with state-owned entities halting purchases since July.
For oil-producing nations in Africa, India’s pivot towards their oil is a positive development. Countries like Nigeria and Angola stand to benefit from increased Indian demand, potentially bolstering their export revenues amidst fierce global competition for market share. This shift not only diversifies India’s oil sources but also provides African nations with a valuable opportunity to strengthen their economic ties with one of the world’s largest energy consumers.
