Indian Oil Corp buys 7 million barrels of crude amid US sanctions on Russia

Indian Oil Corp has purchased 7 million barrels of Middle Eastern and African crude oil, including Abu Dhabi's Murban, amid U.S. sanctions on Russian oil.

Indian Oil Corp (IOC), the country's top refiner, has bought 7 million barrels of spot Middle Eastern and African crude oil via tenders, including a rare purchase of Abu Dhabi's Murban, as U.S. sanctions are expected to hit supplies from Russia, trade sources said on Friday.

As U.S. sanctions are predicted to affect supply from Russia, Indian Oil Corp (IOC), the nation's largest refiner, has purchased 7 million barrels of spot Middle Eastern and African crude oil through bids, including a unique acquisition of Abu Dhabi's Murban.(REUTERS/Yoruk Isik)

Indian refiners are increasing Middle Eastern crude purchases from the spot markets after Washington last Friday announced sweeping sanctions targeting Russian producers and tankers, disrupting supply from the world's No. 2 producer and tightening ship availability.

Totsa, the trading unit of French major TotalEnergies, sold the 2-million-barrel Murban crude cargo to IOC on a delivered basis, the sources said.

The cargo was sold at a premium of at least about $5 a barrel above Dubai quotes when converted to free-on-board basis, one of the sources said.

Other Indian state refiners are also expected to issue tenders for spot purchases, he added.

Russia's oil supplies to Indian state refiners have been hit following U.S. sanctions on two Russian producers that have supplied low-sulphur Arctic oil grades such as Novy Port, ARCO and Varandey to India, the sources said.

IOC's other purchases include a very large crude carrier containing 1 million barrels each of Nigeria's Agbami and Akpo crude and 1 million barrels of Gabon's Rabi Light from Shell, and another VLCC of 1 million barrels each of Agbami and Angolan Nemba crude from Chevron.

The companies typically do not comment on commercial deals.

IOC earlier this week floated tenders seeking sour and sweet crude for loading between the second-half of February and the first-half of March.

Spot premiums for Middle East crude extended their rally on Thursday to their highest in more than two years as strong demand from top importers China and India to replace sanction-hit supplies from Russia and Iran drove up prices.