To make the most of cheap prices, India is set to import 8 million barrels of Iraqi oil to fill its first strategic petroleum reserve (SPR), which would help it counterbalance the impact of an expected pause in China’s strategic stocks build and the start of spring maintenance at Asian refiners.
According to reports, India’s oil ministry on Tuesday has instructed state refiners Indian Oil Corporation and Hindustan Petroleum Corporation to each seek two very large crude carriers (VLCC) of Basra oil for arrival in May-June, totaling 8 million barrels.
Further towards this development, tenders are expected to be issued this month, while a meeting of federal cabinet to approve issue of tenders is expected to take place next week. A committee of directors suggested Basra oil on account of its suitability in refineries on India`s east coast. However, this is expected to be a one-off purchase as the stocks will be used only in case of supply disruptions.
Lastly, India’s finance ministry has provided Rs 24 billion from revised budget estimates for the current fiscal year to fill the first SPR.