Indian state-owned refiner Hindustan Petroleum Corporation Limited (HPCL) has purchased 2 million barrels of crude oil from Nigeria, according to trading sources who spoke to Reuters on Tuesday, as India seeks alternatives to Middle East supply disrupted by the Strait of Hormuz bottleneck.

HPCL acquired the Okwuibome and Utapate crude grades from commodity trader Glencore through a tender process, the sources told Reuters. The Nigerian crude is slated for HPCL Rajasthan Refinery Limited (HRRL), a facility in the state of Rajasthan with a processing capacity of 180,000 barrels per day (bpd). Hindustan Petroleum holds a 74% stake in HRRL, with the remaining 26% held by the state government of Rajasthan.

Since the onset of the Iran war, Indian refiners have scrambled to replace lost Middle Eastern crude supplies with alternatives from producers farther afield. India has significantly increased imports of Russian crude in recent months, with July purchases reaching a new all-time high and accounting for more than half of total Indian crude oil imports.

However, those volumes have proven insufficient, and Indian refiners are now actively seeking supply sources that do not require transit through any of the Middle East's maritime chokepoints. Producers as distant as Angola in Africa and Venezuela in South America have become targets, as term supplies from the Middle East were again trapped in July and unable to reach India as planned. The push underscores India's particular exposure to Gulf disruptions: the country imports roughly 85% of its crude oil needs, and the Strait of Hormuz — through which about a fifth of global oil consumption routinely flows — remains a critical vulnerability for Asian buyers dependent on term contracts with Persian Gulf producers.

Some of India's largest state-held refiners — in the world's third-largest crude oil importing nation — are exploring and testing new crude grades to partially offset supply lost to the Middle East conflict, senior refinery executives told Indian outlet Economic Times late last month.

HPCL reported that it received virtually no term supplies from the Middle East during the first quarter, as cargoes were stranded in the Persian Gulf west of the Strait of Hormuz.

"This time in the first quarter, we hardly got anything from our term contracts because a lot of the term contracts were sitting on the other side of Strait of Hormuz," HPCL managing director Vikas Kaushal told the outlet.

Reuters first reported the purchase.

By Charles Kennedy for Oilprice.com