Indian refiners to cut West Asian crude under annual contracts

Indian refiners have traditionally depended on West Asian sources for more than half of their annual crude oil requirements, with a particular focus on heavier, high-sulphur grades suited to their processing capabilities. The region's geographical proximity to Indian ports has made it an economically attractive supplier for decades.

However, escalating tensions in the region are prompting major Indian oil companies to diversify their procurement strategy. Under their annual supply agreements, refiners are now negotiating lower volumes from West Asian producers, seeking to reduce exposure to potential supply disruptions.

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The shift underscores the vulnerability of India's energy security when heavily dependent on a single geopolitical region. Refiners are exploring alternative sources from Africa, Latin America, and other suppliers to create a more balanced crude procurement portfolio.

Industry analysts note that while West Asian oil will continue to play an important role in India's energy mix, the reduction in long-term contract volumes signals refiners' intent to build resilience against future regional crises. Spot market purchases offer greater flexibility to adjust volumes in response to changing circumstances.