India's State Refiners Buy Millions of Barrels of Crude Oil

India's state-owned oil refining giants stepped up crude purchases last week, securing millions of barrels through separate tenders. According to sources cited by Reuters, Indian Oil Corp (IOC) and Hindustan Petroleum Corp (HPCL) together bought around 7 million barrels of crude, with the cargoes scheduled for delivery over the coming months.

IOC accounted for 5 million barrels of the purchases, securing 1 million barrels of Angola's Kissanje crude from Cathay Petroleum, 2 million barrels of Nigeria's Agbami and Usan crude from Trafigura, and another 2 million barrels of Angola's Nemba and Dalia crude from Chevron. These cargoes are scheduled to arrive between late August and early September.

HPCL purchased 2 million barrels of Brazil's Tupi crude, with deliveries planned for August and September, the sources told Reuters.

Meanwhile, India's crude inventories have recovered sharply after declining in recent months due to the Strait of Hormuz disruptions. At the end of February, the country’s crude stockpiles stood at 107 million barrels, marking the highest month-end level in the previous 12 months. As the conflict disrupted imports, refiners drew on existing inventories to keep refinery operations running, bringing stocks down to 95.5 million barrels by the end of March and further to 90.5 million barrels at the end of April.

Since then, stronger import volumes have helped rebuild inventories. According to estimates from Kpler, a global real-time data and analytics provider, India's crude oil inventory reached 104 million barrels at the end of June, bringing stock levels close to a one-year high.

In the global market, oil prices fell by more than 1% on Monday after OPEC+ agreed to further increase its output targets from August while exports from key producers via the Strait of Hormuz continued to recover, potentially increasing global supplies. Brent crude futures were down $1.02, or 1.41%, at $71.10 a barrel at 0756 GMT after settling 0.45% higher on Friday. US West Texas Intermediate crude fell 80 cents, or 1.16%, to $67.89 a barrel.

On Sunday, the Organization of the Petroleum Exporting Countries and its allies, including Russia, agreed to increase output targets by a further 188,000 barrels per day from August, following similar increases for June and July. However, the increase has largely remained on paper because the US-Israeli war on Iran disrupted tanker traffic through the Strait of Hormuz for key OPEC producers, including Saudi Arabia, Kuwait and Iraq, limiting their output.

Oil prices had remained largely unchanged last week after declining for most of the previous few weeks, with investors watching talks between the US and Iran over shipping through the Strait of Hormuz while also tracking the recovery in Gulf oil exports.