Reliance Industries Makes First Purchase of Canadian Crude Oil from Shell
By PortalPortuario Editorial Staff/ Reuters Agency
@PortalPortuario
Reliance Industries has made a significant move in the global oil market by purchasing 2 million barrels of Canadian crude oil from Shell for delivery in July 2024. This marks the Indian refinery’s first procurement of oil from the new Trans Mountain pipeline in Canada. The fuel will be transferred through a ship-to-ship (STS) operation and then moved by sea to India.
Reliance’s decision to buy Canadian crude oil highlights a growing trend among Asian refiners who are looking to diversify their oil sources. The expansion of the Trans Mountain pipeline, owned by the Government of Canada, will significantly increase the flow of crude oil from Alberta to the Pacific coast of Canada. This will open up access to Asian markets and the west coast of the United States.
Shell will be conducting STS transfers to move four shipments of 500,000 barrels of Access Western Blend (AWB) to a very large crude oil carrier (VLCC). The oil will then be sent to Sikka Harbor in India, according to sources familiar with the deal.
The purchase was made at a discount of $6 per barrel to September ICE Brent on a delivery basis. AWB is a heavy and highly acidic type of diluted bitumen produced by Canadian Natural Resources and MEG Energy.
Canadian oil sellers are actively looking to increase exports to Asia, where demand is on the rise. Chinese companies like Sinochem, Unipec, Sinopec, and PetroChina have already purchased cargoes of AWB and Cold Lake crude from the pipeline for delivery to China in June.
Overall, the purchase by Reliance Industries signifies a shift in the global oil market dynamics and highlights the increasing importance of Canadian crude oil in the Asian market.