Indian Oil Plans Slight Cut to Middle East Crude Deals for 2027/28

Indian Oil Corporation Ltd. expects to make a small cut to Middle Eastern crude bought through annual contracts in fiscal 2027/28, as shipping disruptions in the Strait of Hormuz keep freight rates near record highs.

The plan concerns crude purchased through annual contracts. For the fiscal year ending March 2027, Indian Oil’s plan called for Middle Eastern producers to supply about 47% of its crude imports under annual free-on-board contracts.

Attacks on vessels in the Strait of Hormuz have constrained shipping availability. Some refiners have shifted to spot purchases, while some producers offer delivered cargoes and cover part of the higher freight costs.

Indian Oil and other Indian refiners have also bought Iraqi crude at a discount to the Dubai benchmark in recent months. Annual contract volumes alone do not show how the refiner’s total purchases from the Middle East may change.

Indian Oil has 10 refineries, including Chennai Petroleum Corporation, and group refining capacity of about 80 million metric tons per year.