IOC buys 3 million barrels June-loading US crude as arbitrage opens
State-refiner Indian Oil Corp. Ltd (IOC) has bought 3 million barrels of US crude for loading in June as the arbitrage for American oil to Asia has opened, a senior source privy to the deal said.
IOC, the country’s top refiner, has bought 2 million barrels of Louisiana Light Sweet crude and a million barrels of WTI Midland through tender for arrival in July, said the source. The source did not wish to be identified due to the sensitivity of the matter.
The source said US crude competed with other middle eastern and African grades in an open tender. The source declined to reveal the prices and identity of the seller.
However, trade sources said Chinaoil sold the WTI Midland cargo while Trafigura sold the LLS crude.
Rising production and supplies from US have stretched the discount between US crude futures to Brent to $6 a barrel, making arbitrage economics feasible for India to import US crude, they said.
Separately, IOC has also bought 1 million barrels of Banoco Arab Medium crude in another tender from Shell, the sources said.