The Indian Oil Corporation (IOC) has planned to overhaul its crude sourcing strategy after the supply disruptions in the Middle East. The move comes after supplies through the Strait of Hormuz and the Red Sea were disrupted following the start of the US-Iran war in late February, pushing Indian refiners towards spot purchases.
IOC director (finance) Anuj Jain said, as reported by TOI, that the share of spot buying has risen from 50% to nearly 84%.
“Our spot volume jumped from 50% to almost 84%, and the situation is very very dynamic…we keep track of the development on a day-to-day basis and try to optimize our crude sourcing,” Jain said, as cited by Reuters.
IOC depends heavily on spot purchases of Russian crude, and has also increased imports from West African and Latin American producers to make up for the disruption in supplies from the Middle East, Jain stated.
IOC accounts for about one-third of India’s 5.2 million barrels per day of refining capacity, along with its subsidiary Chennai Petroleum Corporation.
IOC aims to process 1.7 million barrels of crude oil per day at its directly owned refineries in 2027-28. The company expects to expand the capacity of some refinery units by the end of this year.
Recently, the Hindustan Petroleum Corporation Limited (HPCL) shared the plans it implemented during the West Asia war leading to supply chain disruption saying it prioritised the domestic LPG requirements over industrial supplies, and demonstrated the growing resilience and preparedness of Oil Marketing Companies (OMCs) to respond in agile manner.
While speaking exclusively with Times Now Dhruv Kapil, Executive Director – LPG, HPCL said, “To mitigate the impact of potential supply disruptions, OMCs implemented a series of strategic interventions on both the supply and demand sides.”