Indian Oil Corp. Ltd. purchased its first Colombian oil under an optional supply deal with state oil company Ecopetrol, two people familiar with the matter said, as India’s top refiner seek to diversify from Russian oil imports.
Indian Oil has purchased 2 million barrels of Colombian Castilla crude for delivery in late February, the sources said. It has an optional contract to buy about 12 million barrels, equivalent to 6 very large crude carriers (VLCC), they said. Each VLCC can carry 2 million barrels of oil. The deal was signed in late 2021 and has been renewed annually since.
Indian Oil and Ecopetrol did not respond to Reuters’ requests for comments.
Indian refiners are scouting for crude as tighter US and EU sanctions on Moscow-backed oil producers and vessels are disrupting Russian oil imports. India’s Russian oil imports are set to plunge to a three-year low at 1.2 million barrels per day in December, down from 1.84 million bpd in November, ship-tracking company Kpler said in a note.
Indian Oil meets most of its oil needs from Russia and Middle East and rarely buys South American grades despite having optional purchase contracts with Mexico, Brazil, and Colombia.
The terms of the deal, including pricing, have to be mutually acceptable to both the buyer and the seller, and South American crude has rarely been competitive with Russian and Middle Eastern grades, the sources said.