KEY POINTS
- Indian Oil skipped U.S. crude in its latest tender, buying 4 million barrels from Nigeria and Abu Dhabi instead.
- The decision follows rising landed costs of U.S. oil despite favorable Brent-WTI spreads.
- India’s buying strategy remains closely tied to arbitrage windows and political trade pressures, including U.S. tariffs.
Indian Oil Corp, the country’s largest refiner, has stepped back from its usual appetite for American crude, choosing instead to snap up barrels from Nigeria and the Middle East in its latest tender.
The move, according to people familiar with the matter, reflects shifting economics in the global oil trade as landed costs of U.S. crude rise compared with other grades.
The company secured a total of 4 million barrels, including one million barrels each of Nigerian Agbami and Usan from TotalEnergies, and another million barrels of Abu Dhabi’s Das crude from Shell.
All cargoes are expected to arrive in India between late October and early November, with the Nigerian grades purchased on a free-on-board basis while Das crude will be delivered directly to Indian ports.
India recalibrates oil buying as cost gap with U.S. shipments widens
Just a week earlier, IOC had taken in 5 million barrels of U.S. West Texas Intermediate (WTI), taking advantage of arbitrage opportunities that had recently opened up.
Indian refiners had leaned heavily on U.S. supply in recent months, both to capture favorable pricing and to help narrow India’s yawning trade surplus with Washington.
That imbalance has been politically sensitive, with the U.S. doubling tariffs on certain Indian imports to 50% in response to New Delhi’s steady intake of discounted Russian crude.
But for now, traders say the math no longer works. Even with the Brent-WTI differential holding at roughly $4 per barrel, the landed cost of American crude has climbed, pushing refiners like IOC to diversify toward African and Middle Eastern barrels that offer better value.
India, the world’s third-largest oil importer, remains one of the most price-sensitive players in the market. The latest tender underscores how quickly its buying patterns can swing depending on arbitrage opportunities, freight dynamics, and geopolitical crosswinds.
