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India's Oil Import Basket is Expanding as far as Latin America; How Profitable it is ?

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State-owned Indian Oil Corp (IOC) is increasing crude oil imports from as far as Latin America and raising proportion of purchase from spot or cash market to cut costs, said Chairman B Ashok. 
Source:  ET

SNP Insights

In line with global oil prices slump, Indian OMCs are expanding their import destination, to minimise their cost. Purchase of oil from spot market in stead of term market, will give them enough flexibility in terms of volume of oil to be bought, increased profitability due to significantly less cost compared to term agreement price & hence better cash flow. Yet pertaining to fact that oils from Latin America are comparatively heavy & sour in nature than oil from middle east, hence requiring sophisticated refineries with more energy intensive process to produce gasoline & diesel, OMCs should adopt proper balancing method of import to optimise the final cost.

Source: SNP Infra Research