‘MRPL buys Oman oil to replace Iranian crude’1 min read . Updated: 28 Aug 2012, 12:53 AM IST
‘MRPL buys Oman oil to replace Iranian crude’
New Delhi: Mangalore Refinery and Petrochemicals Ltd (MRPL) has bought 600,000 barrels of Oman oil through a tender, a source with knowledge of the deal said, as Iranian supplies are hit by European sanctions.
Indian refiners have struggled to find insurance and shipping for Iranian oil imports since the European Union brought in sanctions banning most of the world’s major insurance firms from covering Iranian oil shipments.
MRPL rarely tenders for high sulphur crude because it normally imports Iranian barrels under an annual term contract with the OPEC member.
The refiner has bought Oman crude from trader Itochu at a premium of about $2.5 a barrel to Dubai.
“Previously MRPL bought high sulphur oil through tender in 2007," the source said.
MRPL has drawn up a plan including tapping spot markets for more high sulphur oil as imports from Iran have been hit by western sanctions, its managing director P.P. Upadhya said recently.
In a separate tender for sweet crude, MRPL bought 600,000 barrels of Qua Iboe from trader Glencore at a premium of about $5.70 a barrel to dated Brent.
Both cargoes are for lifting in the first half of October and have been bought on a delivered basis with the seller arranging shipments.
MRPL imports about 100,000 barrels per day of high sulphur Iranian grades.
India is selectively allowing refiners to import oil using Iran’s ships and insurance cover. But Iran does not have enough aframaxes to suit MRPL’s needs and Indian shippers feel insurance cover provided by local insurance firms is inadequate.