IOC, India's largest state-controlled refiner, has issued two term tenders that would secure the supply of up to 12 million barrels of US crude in each Q4 2020 and Q1 2021. The refiner is asking for at least one 2 million barrels cargo per month to be delivered from October through March at the Paradip discharge terminal on the eastern coast of India, and will consider purchasing one more cargo per month.
Eligible crudes to be offered as single-grade parcels include Midland-sourced WTI, Light Louisiana Sweet (LLS), medium sour Mars, 45°API Eagle Ford, Poseidon and light sour Thunder Horse.
The list of suitable crude grades expands for co-loaded cargoes on very large crude carriers (VLCCs) to also include Bakken, Eugene Island, Southern Green Canyon (SGC), Alaskan North Slope (ANS) and US domestic sweet (DSW) blend. This is the first time IOC has been seen to shortlist DSW, which is similar in quality to WTI but generally comes by way of Cushing, Oklahoma.
Offers for both tenders are due 12 June on a delivered basis relative to Dated Brent. A freight component will be computed using 75 percent of the Baltic Exchange index for VLCC rates from the US Gulf coast to China, or just 70 percent of that rate if the shipper elects an alternative discharge port on the western coast of India.
