India’s top oil explorer may set up refinery in Uttar Pradesh
India’s Oil and Natural Gas Corp. is considering setting up a multibillion dollar refinery and petrochemical project in the nation’s most populous state to bolster its business as fuel demand expands. The New Delhi-based company — India’s largest crude explorer — is looking at a 9-million-ton-a-year project in Uttar Pradesh that could cost more than 700 billion rupees ($8.3 billion), according to the four people familiar with the matter, who declined to be identified as the talks are not public. ONGC has held talks with Bharat Petroleum Corp, Ltd. to set up the unit in the city of Prayagraj as the state-owned refiner holds a parcel of land there, they said. India’s is one of the world’s fastest-growing major economies, with surging crude and petrochemicals consumption, even as renewable-energy capacity gets built out. As it’s common in the country for big-ticket infrastructure and commercial projects to face delays given the slow process of land acquisition, the potential access to BPCL’s holdings may prove to be an advantage. BPCL itself has been considering setting up a refining and petrochemical unit, either in the coastal state of Andhra Pradesh or Uttar Pradesh, two of the people said. The company, which has hired a US-based consultant for a sitting study, favors Andhra Pradesh as the state has promised incentives, they said.
WTI Breaks Below $70 as Concerns Over Oil Demand Persist
Crude oil prices extended a decline that began earlier this week today as pessimism about demand, especially from China, deepened while expectations arose that Libya could resume its oil exports. West Texas Intermediate had dipped below $70 per barrel earlier today, with Brent crude sliding below $74 per barrel, after Libya’s rival governments reached a deal to appoint a governor to Libya’s central bank, which would resolve the dispute that prompted the shutdown of oil fields and export terminals last month. The shutdowns had decimated the country’s output of some 1.2 million barrels daily. That outage sparked some oil optimism and reports that OPEC could go ahead with its partial rollback of production cuts agreed last year, on apparent expectations that the Libyan shutdown will extend in time. Now that this is not the case and oil has fallen to the lowest since last December, chances are the cartel will keep its cuts in place lest it risks an even bigger price slump. “Easing political tension in Libya potentially seeing some supplies return and economic weakness in the world’s largest oil consumers, U.S. and China, serve as a confluence of headwinds for oil prices,” IG analyst Yeap Jun Rong told Reuters.
Russian oil Shipping costs to India easing
Freight rates to ship Russia’s Urals crude to India have fallen further and remain at their lowest since Western countries introduced a price cap late in 2022, boosting the economics of Moscow’s oil exports, industry sources told Reuters on Monday. Prices for Urals in India have also strengthened, keeping estimates on a FOB basis in Russian ports almost $10 above the price cap limit, Reuters calculations shows. The Group of Seven countries (G7), including the United States, and the EU have imposed a price cap on Russian seaborne shipments of crude oil since December 2022 as part of sanctions on Moscow. Buyers are only able to use Western services such as shipping and insurance when Russian crude trades below $60 per barrel. According to the sources, the cost of transport to India for loading mid-September from Russia’s Baltic ports of Primorsk and Ust-Luga by tankers which can hold 100,000 metric tons has dropped to approximately $4.25-$4.50 million from $4.7-$4.9 million in July-August. The cost from the Black Sea port of Novorossiisk to India for Suezmax tankers, which can hold 140,000 tons, fell to around $3.8 million for a one-way trip from $4.3-$4.5 million over the same period, the sources added.
India’s Petroleum Exports To Europe Up 2,53,788% Since 2018
India’s petroleum exports to various European markets have seen an extraordinary increase of 2,53,788 per cent in volume between 2018-2019 and 2023-2024. This surge was driven by logistics challenges during the COVID-19 pandemic and the geopolitical impact of Russia’s invasion of Ukraine in early 2022, which boosted demand for Indian petroleum in Europe. In terms of value, India’s exports to these countries grew by 250 per cent. According to trade data from the Ministry of Commerce and Industry, around 15 to 17 European nations consistently rank among the top 100 countries to which India exports petroleum products each year. The Netherlands leads the list of European countries importing petroleum from India. In 2018-2019, the Netherlands imported 9,740.51 metric tons (MT) of petroleum products, a figure that surged to 24.73 million metric tons by 2023-2024. In terms of value, imports from India grew from $5.9 billion (Rs 489.7 billion) in 2018-2019 to $20.5 billion (Rs 1,703.5 billion) in 2023-2024.