Significant cut unlikely in Gulf oil supplies to India

West Asian crude oil exporters are unlikely to significantly cut supplies to India next year to satisfy growing European demand, executives at Indian state-run refiners said as they prepared to negotiate annual purchase deals with the Gulf suppliers.

State-run refiners source about 60% of their crude oil requirement through term deals, renewed annually, mainly with West Asian national oil companies. The balance is sourced from the spot market, and this year cheap Russian oil has gained a big share in Indian spot purchases. For term deals that begin in January, negotiations start in September-October while for contracts starting in April, talks begin in December-January. These contracts with West Asian producers mostly have both ‘firm’ and ‘optional’ volumes.