Indian state refiners have suspended purchasing crude oil from China-linked companies, Reuters reported, citing three sources familiar with the matter. This move follows India’s new regulations made to curb imports from countries which have borders with India. The new rules went into effect on July 23 after a deadly military standoff with China in the Himalayan borders.
The new regulation requires any bidders from countries sharing a border with India to register with a department in the federal commerce ministry in order to participate in Indian tenders. India shares borders with several countries, including China, Pakistan, Bangladesh, and Myanmar, but the new order does not specify any name of the country.
According to the sources, Indian state refiners have since last week stopped sending crude import tenders to Chinese traders such as PetroChina, CNOOC, and Unipec. These refiners also suspend fuel imports from PetroChina, China Aviation Oil, and Unipec’s subsidiaries. Besides, they stop chartering Chinese tankers unless the import tender was awarded on a CIF basis in which the ship is arranged by the seller.
China does not export crude oil to India, but many Chinese companies are major players in the global commodity trade. Chinese firms also own equity stakes in many oil fields across the world and often submit competitive bids in oil import tenders issued by Indian state-owned refiners.
