Indian Oil Corp Reduces Middle East Crude Term Contracts

Indian Oil Corporation is reducing the volume of crude oil it purchases under term contracts with Middle Eastern producers for the coming year. The state-run refiner, which imports over 1.5 million barrels a day, is shifting its procurement strategy in response to supply uncertainties and vessel attacks in the Persian Gulf and the Strait of Hormuz.

The decision follows eight months of war in Iran, which has disrupted regional supplies and pushed freight rates toward record highs. While the company previously intended to source 47 percent of its crude from West Asian producers on a free-on-board basis for the financial year ending March 2027, it will now trim these volumes, including crude destined for its Chennai Petroleum Corp. unit.

To offset the instability, Indian refiners have increased spot market purchases and imports of Russian oil. Additionally, the company has paused a tender to acquire at least two very large gas carriers. This pause comes after vessel costs nearly doubled to approximately 150 million dollars since the tender was first issued in July.