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Indian Oil Corp doubles annual oil purchase deal with Nigeria


Indian Oil Corp has doubled its annual oil purchase deal with Nigeria for 2015/16 to 60,000 bpd, its chairman B. Ashok said on Friday.

Indian refiners boosted imports of African crude oil in 2015 to the highest in at least five years and slightly cut their intake from Latin America as refiners benefited from changing global oil flows caused by surplus supply.

In 2015, India imported 787,700 barrels per day (bpd) of African oil with the continent accounting for about a fifth of the South Asian nation’s overall imports from 16.7 percent a year ago, according to data compiled by Reuters.

Middle Eastern grades accounted for about 57 percent of imports from 59 percent a year ago, remaining India’s main source of oil.

“We will increase imports from Africa going forward mainly from Nigeria.” India’s Oil Minister Dharmendra Pradhan said on Friday, ahead of New Delhi hosting a two-day hydrocarbons conference with African nations next week

Indian Oil Corp has doubled its annual oil purchase deal with Nigeria for 2015/16 to 60,000 bpd, its chairman B. Ashok said on Friday.

India, the world’s fourth-biggest oil consumer, raised its imports of African oil as the continent’s mainly light, sweet crudes helped fill increasing demand for gasoline and diesel fuel. India’s gasoline consumption rose 14.7 percent in 2015 while diesel climbed 5.3 percent.

Falling African crude prices also spurred more interest from Indian refiners and a refinery expansion helped drive demand for light crude.

African oil was cheaper relative to other regions as benchmark Brent crude fell during the year because of glut caused by surging production in Saudi Arabia, Iraq, the U.S., and Russia.

Brent’s premium to Dubai DUB-EFS-1M was below $3 a barrel for most of 2015, making African oil attractive against Middle Eastern crude.

India imports 80 percent of its crude needs and has traditionally relied on the Middle East for heavy, sour oil supplies and West Africa for lighter, sweet crude.

West African crude prices started falling in 2014 as U.S. refiners replaced their imports with domestic light, sweet shale oil, allowing other nations to take advantage of the lower cost crude.

India’s imports of African oil also increased last year as IOC’s new 300,000-bpd Paradip refinery mainly processed sweet oil.

Global oil prices have tumbled in 2016 to their lowest level in 12 years, dropping below $30 a barrel. A number of major international banks have slashed their price forecasts.

In 2015, Iran continued to be India’s seventh-biggest source for crude oil although its share in the overall imports declined to 5.2 percent from 7.3 percent a year earlier.