Crude oil from Venezuela could break records in October. There is a reason for this too. Venezuelan crude oil is available at huge discounts. Due to which many companies like Reliance are buying this oil in large quantities. On the other hand, expensive supplies of Russian oil have dampened demand. This is why Venezuela’s oil supply continues to increase. Let us tell you that Venezuela is very close to India compared to Russia. The shipping cost of ordering oil here is also very low. Apart from this, oil from Venezuela is also getting more discount. Let us also tell you what kind of reports have come up.

Imports will be highest in 7 years

Venezuelan crude oil arrivals in India this month are expected to almost double to 465,000 bpd from 196,000 bpd in September, according to Kpler estimates. If all scheduled shipments arrive on time, it will be the highest volume since December 2019. All shipments from South American producing countries to India have destination specified as Sikka Port. Reliance uses this port for its Jamnagar refinery complex, the world’s largest refinery. Actual supplies in October may vary, as ship tracking data from an analytics firm shows at least two tankers are due to arrive on India’s west coast on October 31. However, there has been no official statement from Reliance Industries.

Supplies from Russia are dwindling

India resumed oil purchases from Venezuela in February after a gap of almost a year. In fact, after the ouster of former Venezuelan leader Nicolás Maduro, US sanctions were lifted, leading to an increase in supply. Also, imports from Russia (the largest supplier of crude oil to India) are falling as prices rise. The price of Russia’s main oil, ‘Urals Grade’, loaded from the Baltic, has reached a wartime peak. The South Asian country’s refiners are also cutting back on purchases from Russia as the threat of new punitive tariffs grows due to tougher US sanctions legislation. Moscow accounted for up to 56% of India’s crude oil imports in July, falling to around 35% in September, according to Kpler data.

Venezuelan oil at a huge discount

Sumit Ritolia, Kepler’s senior manager of modeling, said since the beginning of the year Venezuelan crude has become an important part of diversifying supply sources for India. They expect supplies in October to be around 350,000 barrels per day, as some ships may not be able to unload their cargoes until the end of the month. Venezuela’s flagship ‘Mare’ crude is selling at a discount, while Russian ‘Urals’ oil is selling at a premium (higher price) before shipping costs.

The deep discount offsets the long-distance travel from Venezuela and the challenges of processing ‘merry’ crude. ‘Mere’ is a thick and high sulfur crude. Reliance’s Jamnagar complex is ready to process such barrels. However, this surge in imports may be difficult to sustain due to rising tanker rates. He said these barrels are difficult and heavy to process and not every Indian refinery can process them continuously or in large quantities.