Iraq has cut its annual crude oil supplies from Basra to many Indian refineries by 20% for 2021 as part of its commitment to OPEC’s decisions, sources told Reuters.
However, this reduction of supplies may erode Iraq’s market share in India. Iraq was the top oil supplier for India during 2020.
In addition, sources said that Iraq’s Oil Marketing Company (SOMO) has cut the volume of supplied oil to several Indian refineries by 10%-20%. Yet, SOMO rejected to comment. It referred the reason of this action is to compensate for the higher produced volumes during 2020.
A source from one of the Indian refineries commented that they did not expect that Iraq cut the supply and they have to find alternatives such as benefitting from the spot markets.
Moreover, sources said that SOMO plans to reduce oil contract of Baharat Petroleum to 100,000 barrels per day (bbl/d). On the other hand, Hindustan Petroleum has asked SOMO to reduce its supplied volumes of oil to 50,000 bbl/d from 80,000 bbl/d during 2020.
Reliance Industries also will get 33,000 bbl/d of Basra Medium grade instead of 66,000 bbl/d of Basra Light. Regarding HPCL, Iraq has approved its request for lower supplies while the companies are discussing for more additional supply of Basra Medium grade.