Singapore/New Delhi: Reliance Industries, which runs the world’s biggest refining complex, made a rare purchase of Russian Urals crude for July-loading, as the arbitrage window for Western cargoes remains open, trade sources said on Wednesday.

Reliance bought one Very Large Crude Carrier (VLCC), or 2.0 million barrels of Urals from oil trader Gunvor, the sources said.

The company also purchased the Urals cargo in April, they said, nearly a year after its last purchase of the medium-sour crude.

Reliance’s daily crude oil purchases rose 42% in April from March, when it also bought Australian heavy crude Pyrenees for the first time.

Since the startup of the new plant in December 2008, Reliance has been diversifying its crude slate, making several new and rare purchases, capitalising on the complexity of its plants that allow it to improve margins by processing heavy grades.

Reliance, which runs the refining complex at Jamnagar in Gujarat, imported nearly 1.42 million barrels per day (bpd) of crude last month, up from 998,350 bpd in March and from 945,100 bpd a year ago, data showed on Wednesday.

“It appears Reliance is making up for Iran crude shortfall and looking at diverse sources. Its crude from the Middle East, especially from Saudi Arabia has come down," said a trade source.

Reliance has not renewed a contract to import crude oil from Iran for financial year 2010, industry sources have said.

Narrowing Brent/Dubai Exchange of Futures for Swaps (EFS) also offered opportunities for flows from Europe and West Africa to Asia, the sources said, a trend reflected in Reliance’s crude purchases.

Front-month EFS for July was valued at around 50 cents a barrel this week, down from the May EFS which jumped to $2.50 a barrel in mid-March, the highest level since December 2008 when OPEC producers began record supply curbs.

Open Arbitrage

“The arbitrage window for Western cargoes, such as Urals, to Asia remains open," said a trader with a East Asia refiner. “It may not be that wide open for East Asia at the current prices, but India is half way, marking it more economical."

Urals was valued at a premium of around $1.00 a barrel to Dubai to East Asia on a cost-insurance-freight basis, the trader added.

The prices were competitive to rival Oman crude, whose value was assessed at a 50-cent discount to Dubai on the Dubai Mercantile Exchange.

Refiners and traders were reluctant to take July Oman cargoes, saying the prices were too expensive compared with other medium and heavy crudes after values of benchmark Dubai crude was pushed up in the past two months.

More Urals cargoes are offered to Asian buyers, including Japan and Taiwan refiners, they said.