Indian Oil Increases Spot Crude Purchases Amid Middle East Supply Disruptions

Post by : Saif

Indian Oil Corporation (IOC) has significantly increased its purchases of crude oil from the spot market as supply disruptions in the Middle East continue to affect global energy flows.

According to company officials, IOC has raised the share of spot purchases from around 50% to nearly 84%, allowing it to respond quickly to changing market conditions and maintain steady crude supplies for its refineries.

Supply Disruptions Reshape Sourcing Strategy

The shift comes as shipping challenges in the Strait of Hormuz and the Red Sea have disrupted traditional crude supply routes.

IOC said it is closely monitoring developments on a daily basis and adjusting its sourcing strategy to ensure uninterrupted refinery operations while optimizing procurement costs.

West African and Latin American Oil Gains Importance

To compensate for reduced availability of Middle Eastern supplies, IOC has increased crude purchases from West African and Latin American producers.

The company also continues to rely heavily on spot purchases of Russian crude oil, which remains an important part of its refining portfolio.

Diversifying crude sources is expected to strengthen India's energy security amid ongoing geopolitical uncertainty.

Read more: French Naval Forces Divert Russian ‘Shadow Fleet’ Oil Tanker to Port for Checks

Refining Capacity Expansion Continues

IOC, together with its subsidiary Chennai Petroleum Corporation, accounts for roughly one-third of India's refining capacity.

The company aims to process approximately 1.7 million barrels of crude oil per day at its directly owned refineries during the 2027–28 financial year, supported by planned capacity expansion projects expected to be completed later this year.

Energy Security Remains a Priority

India, one of the world's largest crude oil importers, continues to adapt its procurement strategy to manage supply risks and maintain stable fuel supplies.

The increased use of spot purchases reflects the country's efforts to ensure energy security while responding to rapidly changing global oil market conditions.

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