India sends UAE crude cargo to strategic reserves

Market: Crude oil, Freight
14/04/20

India has diverted a cargo of crude from the UAE to the southwest port of Mangalore to help fill its strategic petroleum reserve (SPR), amid slumping demand from the country's refiners because of the Covid-19 outbreak.

The Suezmax tanker Chafa discharged 1mn bl of Upper Zakum crude at Managlore on 12 April. India's biggest state-controlled refiner IOC initially chartered the vessel on 23 March at a Worldscale (WS) rate of 119 from the UAE to Chennai on India's east coast, with 4-6 April loading dates, shipping fixtures show. But the discharge port was later changed to Mangalore, a shipbroker said.

IOC "is importing crude oil to strengthen India's Strategic Petroleum Reserves while taking advantage of prevailing low crude prices," under the guidance of the oil ministry, IOC director Ranjan Kumar Mohapatra said.

The Indian government is looking to fill its SPR with whatever crude is cheaply available amid falling prices.

India's 39mn bl of SPR capacity comprises 9.7mn bl at Vishakhapatnam, 11mn bl at Mangalore and 18.3mn bl at Padur, all of which are underground rock caverns. Around 40pc of this capacity is available, mostly at Padur.

Mangalore port is applying a 14-day quarantine rule to vessels that have departed from China and other coronavirus-hit regions. Berthing at the port is expected to be delayed for 2-3 days.

By Vivien Gu

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