Indian State Refiners May Sharpen Competition For Venezuelan Oil
Government-controlled refineries in India are joining billionaire Mukesh Ambani’s Reliance Industries Ltd. in seeking to take Venezuelan crude, intensifying competition with Chinese users for discounted barrels.
![A Bharat Petroleum refinery in Mumbai.](https://media.assettype.com/bloombergquint%2F2023-12%2Ffdbab98e-5e93-44ff-85bd-7dc22af69ff8%2F_1x_1.jpg?auto=format%2Ccompress&w=200)
(Bloomberg) -- Government-controlled refineries in India are joining billionaire Mukesh Ambani’s Reliance Industries Ltd. in seeking to take Venezuelan crude, intensifying competition with Chinese users for discounted barrels.
State-owned Bharat Petroleum Corp. is in the market to buy from the producer, according to a person familiar with the development. Hindustan Mittal Energy Ltd., a smaller state-owned processor, is already buying Venezuelan oil, another person with the direct knowledge of the matter said.
Venezuela’s role in the global oil market is shifting after the US relaxed sanctions on the nation, raising the prospects of greater crude sales. Still, that move now risks being reconsidered as Washington expressed concern about the slow pace of reciprocal moves from Caracas and, separately, geopolitical tensions in the region increased amid a border dispute with Guyana.
India, the third-biggest oil importer, was a major buyer of Venezuelan crude before the sanctions were imposed by Washington, forcing its refiners to cede ground to Chinese competitors from 2021. The fast-growing Asian economy is a key market for oil producers, especially from Russia amid the war in Ukraine.
“Indian refiners are likely to keep their purchases of Russian crude, and cut back on spot purchases of Atlantic crude, as they resume their Venezuelan crude purchases,” said Serena Huang, lead Asia analyst at Vortexa Ltd.
Another state-linked Indian refiner, Hindustan Petroleum Corp., meanwhile, is waiting for local processing upgrades before it enters the market for Venezuelan oil, according to an executive. Among the needed steps, its Visakhapatnam refinery will be expanded by 4 million tons to 15 million tons.
In taking Venezuelan oil, the state refiners would be joining Reliance, which has already booked two to three supertankers to load between December and early January. Shipbrokers cautioned the final destinations may change.
See also: Chinese Refiners Shun Venezuelan Oil as Discounts Evaporate
Still, the overall volumes that India’s state refiners can import will be low as they are limited in their capacity to process Venezuelan oil, according to R. Ramachandran, former refinery head of Bharat Petroleum.
--With assistance from Sharon Cho.
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