India’s state refiners stop oil imports from Chinese firms

In a string of recent government orders to check trade dealings with China, Indian state refiners — which control 60% of India’s 5 million barrel-per-day refining capacity – are learnt to have stopped buying crude oil from China-linked companies.

The order comes close on the heels of the Galwan border clash in which 20 Indian and unspecified number of Chinese troops were killed in eastern Ladakh.

Indian state refiners have been inserting a clause since July 23 a regulation in their import tenders restricting dealings with companies from countries sharing a border with India.

Indian state refiners decided to stop sending crude import tenders to Chinese trading firms such as CNOOC, Unipec and PetroChina, among others, sources have told Reuters.

India is the world’s third biggest oil consumer and importer. China does not export crude to India, but Chinese firms are major traders of the commodity globally.

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State refiners will, however, take delivery of crude in tankers linked to China if the import tender was awarded on a cost, insurance, freight (CIF) basis, where the seller arranges the ships, the sources said.

India has surplus refining capacity. Most refiners are operating their plants at below capacity as Covid-19-related restrictions have dented fuel demand.

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