Indian State Refiners Buy Crude Months Early Amid Supply Risks

State-owned refiners in India have shifted their procurement strategy, buying spot crude oil for October and November. This departs from the standard one-to-two month buying window as companies seek to mitigate supply uncertainties. Indian state-owned refiners, including Hindustan Petroleum Corp. and Mangalore Refinery & Petrochemicals Ltd., are diversifying their sources by booking cargoes from West Africa and Middle Eastern regions that bypass the Strait of Hormuz.

The surge in early buying follows a drop in Russian supplies to their lowest levels since May, caused by Ukrainian attacks on Russian energy infrastructure. Russia currently provides approximately half of the crude for these state-run refiners. Simultaneously, tensions between the United States and Iran have disrupted Middle Eastern exports, highlighted by Iranian attacks on two ships in the United Arab Emirates and a deadlock over the Strait of Hormuz.

Additional pressure comes from the United States Senate, which passed legislation authorizing tariffs on major purchasers of Russian energy. Refiners are also preparing for an expected increase in domestic demand during the September festival season.