At least three Indian refiners have curbed oil imports from Middle East producers, including Saudi Arabia, for May because of storage constraints as local fuel demand slumped following the coronavirus outbreak, company officials said.
This is the second consecutive month that Indian refiners have cut their long-term crude imports as space to store excess oil is running out because companies are cutting their processing as stay-home measures to curb the spread of the virus have slashed fuel demand.
One of the refinery officials said his company has cut May purchases from Saudi Arabia by about 80%, while an official at a second company said it will take 66% less oil from Saudi Arabia in May compared with their average monthly purchases from the country.
For crude supplied by Abu Dhabi National Oil Co. , the first refinery official said his company will take just one cargo in May instead of an average of two each month, while the second refinery official plans to receive some deferred cargoes from April and has nominated only one cargo for May.
Both officials said their companies will take about 75% less crude from Kuwait Petroleum Corp in May compared to their average monthly purchases.
“There is no demand, so purchases are low,” said the source at the first refiner.
An official from a third Indian refinery said his company would be taking less oil from the Middle East in May than their typical monthly average as demand has dwindled, without disclosing the volume.
The Indian refinery sources declined to be named because of the sensitivity of the matter. Saudi Aramco and ADNOC declined to comment and KPC did not respond to Reuters’ request seeking comments.