India’s imports of Venezuelan crude are set to more than double in October, taking supplies from the South American producer to their highest level in nearly seven years, Bloomberg reported on Wednesday.
This comes as steep discounts draw Indian refiners and Russian oil becomes more expensive.
Venezuelan crude deliveries to India are expected to rise to about 465,000 barrels per day this month from 196,000 BPD in September, according to Kpler estimates cited by Bloomberg.
If all scheduled cargoes arrive on time, the report predicted, October imports would be the highest since December 2019.
All Venezuelan cargoes bound for India list Sikka as their destination, the port that serves Reliance Industries’ Jamnagar refinery complex in Gujarat, the world’s largest.
Actual October flows could vary, with at least two tankers scheduled to arrive on India’s west coast on October 31, according to ship-tracking data.
Imports resumption
India resumed buying Venezuelan oil in February after an almost year-long pause, following the lifting of US sanctions after the ouster of former Venezuelan leader Nicolás Maduro. At the same time, purchases of Russian crude, India’s biggest source of oil, have declined as prices have risen.
Russia’s share of India’s crude imports fell to about 35 per cent in September from as high as 56 per cent in July, according to Kpler data. Refiners are also cutting Russian purchases amid the threat of fresh punitive tariffs under a sweeping US sanctions law.
“Venezuelan crude has become an increasingly important part of India’s diversification since the start of the year,” said Sumit Ritolia, senior manager of modelling at Kpler.
He expects actual October deliveries to be closer to 350,000 bpd as some vessels may not discharge before the end of the month.
Venezuela’s Merey crude, its flagship grade, is currently selling at a discount, while Russian Urals is trading at a premium even before accounting for shipping costs. The price gap makes Venezuelan barrels more attractive despite the longer voyage to India.
The discount also helps offset the challenges of processing Merey, a dense, high-sulfur crude. Reliance’s Jamnagar complex is reportedly equipped to process such barrels, giving the refiner greater flexibility to tap discounted Venezuelan supplies.
However, higher tanker rates could limit the sustainability of the surge.
“These barrels are relatively difficult, heavy barrels, and not every Indian refinery can process them continuously or in large proportions,” Ritolia said.
