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Due to falling fuel demand and overflowing storage capacity, at least three oil refineries in India have ordered lower crude oil imports for May from the Middle East, including the world’s leading exporter from Saudi Arabia, they told Reuters refinery officials.
Two oil refineries will cut their imports of crude oil from Saudi Arabia by 66 percent and 80 percent by May, as India, with a population of 1.3 billion people, entered a national shutdown in late March. The blockade has been extended until May 3.
Due to India’s blockade and struggles to contain the spread of the coronavirus, fuel demand at the world’s third largest oil importer is plummeting, so refineries are reducing production rates and struggling to store products. raw and refined in less and less available storage capacity.
“Some Indian refineries have canceled their shipments for April and May,” a source with a Middle East oil producer told Reuters, confirming the collapse in demand for oil from India. “They will take these charges in the latter part of the year to meet their annual commitment,” the source told Reuters.
Earlier this month, Indian Oil Corp (IOC), the country’s largest fuel refiner and retailer, was said to have declared a force majeure on oil imports from some of its major oil suppliers, including Saudi Arabia.
With the collapse in demand, India’s oil refineries have already filled 95 percent of their combined storage capacity for 85 million barrels of fuel, officials at three state refineries told Bloomberg. Even the tanks at the 66,000 fuel stations in India are full, as more than a billion people are blocked and do not drive.
In the first two weeks of April, India’s gasoline and diesel consumption, more than half of the country’s oil demand, fell by more than 60 percent, according to Bloomberg estimates.
By Tsvetana Paraskova for Oilichelin
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