Guyana’s medium sweet Liza crude could become a new source of supply for India in coming years provided that it is competitively priced.
“India has been diversifying its crude imports, including taking substantial volumes from the U.S. in recent months,” said Lim Jit Yang, adviser for Asia-Pacific oil markets at S&P Global Platts Analytics. “With crude production from Guyana set to rise over the coming years, it will become a new source of supply for India, provided it is priced competitively.”
One million barrels of oil from the South American country was purchased by Indian Oil Corporation Ltd. over the last few days and the cargo is now en route to the Paradip refinery in Odisha.
The move by Indian refiners to snap up maiden import deals for newer crudes such as Guyana’s Liza and Brazil’s Tupi is a sign that one of Asia’s fastest-growing oil consumers is increasingly looking to diversify its feedstock basket and have steady supply sources beyond the Middle East.
According to S&P Global Platts, the purchases of newer crudes not only highlight the growing flexibility of Indian refiners, but also that refiners are increasingly keen to make spot purchases a relatively bigger part of their portfolios in order to take advantage of market fluctuations.
“Indian oil ministry officials said the latest deal for Liza crude could open up the possibility of exploring long-term supply contracts with the Guyanese government,” S&P Global Platts said.
Liza crude is a medium sweet grade with 32.1 API gravity and 0.51% sulfur content produced at the Stabroek block in Guyana.