IOC Relations with ME Oil Exporters Remain Intact

Indian Oil Corporation’s (IOC) spot purchases have dropped but the energy firm’s relations with the Middle Eastern oil exporters remain intact, a senior official said on Monday. “Oil purchases from the Middle East continue to remain as it is. The total contracts that we have lined up are absolutely in place. In March, we saw a record 5.6 million barrels per day consumption of petroleum products. So we maintained what we committed to the Middle East. Though we might have taken oil from other geographies, but my continued relations with the Middle East in terms of oil supply remain intact,” VS Venu Prabhakar, managing director of IOC, said during the 30th Annual Middle East Petroleum & Gas Conference (MPGC 2023) in Dubai on Monday. He said spot purchases have gone down because somewhere there has to be a dip to accommodate Russian oil. India’s OPEC imports have fallen from 70% in 2021-22 to 61% in 2022-23.

SEEKING LONG-TERM CONTRACTS

He said that given the very robust demand which is going to remain at least for two decades from now, IOC sees opportunities and partnerships for refining and petrochemical. “We view long-term contracts with oil suppliers. All the contracts are yearly but we would be keen for more long-term contracts.” He said that global oil demand will grow at a slim pace of 0.5% per annum while India’s demand will grow at 2.7% annually. And it is expected to double by 2050. “This massive growth in energy demand is driven by robust economic growth prospects as the economy size to be US$5 trillion by 2025. And India taking the leading role of a global growth engine, it is expected to become third largest by exchange range by 2027,” he added.

OPEN TO MORE PIPELINES

Prabhakar said the company’s refining capacity will go up and they’ll dedicate 25% to 30% for export potential. “Because we find a lot of refineries are getting shut down in the US and Europe and countries in Southeast Asia joining India and we want to maintain the relationship with buyers by supplying them with petroleum products, maybe even through pipelines. We have pipelines going to Nepal and Bangladesh and we intend to have pipelines so that where ever possible we can supply production to neighboring countries,” the IOC managing director said during the first day of the conference.