Indian Refiners Started to Buy Venezuelan Crude

Indian refiners have begun to buy Venezuelan crude just shortly after the easing of sanctions, increasing competition for Chinese teapots who have been the most active buyer in recent years according to S&P Commodity Insights.

• Around 20,000t of Venezuelan crude is expected to be loaded for India in November and 390,000 tons in December, Kpler data showed.
• "Some Venezuelan crude is now getting loaded and is on its way to India. With Venezuelan crude entering the market, it provides an opportunity for Indian refiners to seize the moment and enhance their sour crude refining margins, thereby boosting overall gross refining margins," said Sumit Ritolia, refinery economics analyst at S&P Global Commodity Insights.
• Prior to the sanctions, India imported around 300kbpd of Venezuelan crude grades, S&P data showed.
• India’s Reliance and Nayara Energy would be most benefitted from Venezuelan crude since they have refiners with high complexity that can process the heavy grades," said Rajat Kapoor, managing director for oil and gas at Synergy Consulting.
• "With the US now officially easing sanctions of Venezuelan crude, we should expect larger volumes to flow into India. Indian private refiners have previously engaged in crude-for-products arrangements with Venezuela, benefiting both countries while also helping India curtail its hard currency outflows," Kapoor added.
• Trading sources told Reuters last week that Chinese independent refiners are holding off making new purchases of Venezuelan oil due to discrepancies in offered prices following the easing of US sanctions.
• Despite the US easing sanctions on Venezuela on 16 October, sanctions could be reimposed on 30 November if the country fails to release political prisoners and Americans that the US says are wrongfully detained, as well as lifting public office bans. The ban currently applies to the winner of the main opposition party’s primary, Maria Cornia Machado.