Shale Boom Brings Latin American Oil Bonus For Indian Refiners
Over the same seven-year period, Middle East imports slipped to some 62 percent of India's basket from 73.5 percent while West African grades dipped to 16 percent from 20 percent.
That shift will continue, as state-run refiners join private players Reliance and Essar Oil in the race to improve refining margins.
"Like private (ones), state-run refiners will widen their crude slate to leverage the discount on Latin American grades versus West African and Middle East grades because of a surge in U.S. output," said Praveen Kumar at consultancy FACTS.
The state refiners - IOC, MRPL, BPCL and Hindustan Petroleum Corp - own about 55 percent of India's 4.3 million bpd capacity.
"India has some of the most competitive refineries capable of capturing ... cheaper crudes from far-flung places like Latin America," said Mike Muller, vice-president for crude oil trading at Shell.
Freight rates are also low at the moment - and in some cases, being included in the deal.
"In many supply contracts (for example, with Colombia's Ecopetrol and Mexico's PEMEX), freights are being shared (with the seller)," said a trader involved in India purchases.
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