India’s purchases of Venezuelan oil are expected to reach their highest level in nearly seven years this month, driven by steep discounts that are attracting refiners such as Reliance Industries Ltd as Russian imports become more expensive.
Venezuelan oil shipments to India are projected to more than double to about 4,65,000 barrels a day this month, up from 1,96,000 in September, according to Kpler forecasts. If all planned cargoes arrive on schedule, it would mark the highest level since December 2019.
Every cargo from South American producers bound for India lists Sikka as its destination, the port used by Reliance for its Jamnagar refinery complex, the world’s largest.
October shipments may vary, however, as at least two tankers are expected to reach India’s west coast on 31 October, according to shipping data from the analytics company.
A Reliance spokesperson did not immediately respond to a request for comment.
India resumed buying Venezuelan oil in February after a nearly year-long hiatus, as the easing of US sanctions following the removal of former leader Nicolás Maduro helped boost shipments. At the same time, imports from Russia, India’s largest crude supplier, are falling as prices rise, with Urals crude shipped from the Baltic reaching a wartime high.
Refiners in the South Asian country are also reducing Russian purchases following a comprehensive US sanctions law that heightened the risk of new punitive tariffs. Moscow’s portion of India’s crude imports decreased to roughly 35 per cent in September, down from a peak of 56 per cent in July, based on Kpler data.
“Since the beginning of the year, Venezuelan crude has grown more significant in India’s diversification efforts,” stated Sumit Ritolia, senior modeling manager at Kpler. He anticipates that October deliveries will approach 3,50,000 barrels per day since certain vessels might not unload before the end of the month.
Merey crude, Venezuela’s main export, is priced lower, whereas Russian Urals is sold at a premium, excluding shipping expenses.
The significant discount mitigates the extended journey from Venezuela and the difficulties in refining Merey, a heavy, high-sulfur crude. Reliance’s Jamnagar facility is capable of managing such barrels. However, increasing tanker rates might complicate the ability to maintain the rise in imports.
