Author: Mohi Narayan and Nidhi Verma
SOUTH GOA, India, Jan 30 (Reuters) – A rare combination of growing fuel demand and expanding refining capacity is attracting global commodities traders to India, with companies such as Trafigura seeking long-term partnerships with state oil companies.
With consumption growth slowing in most major economies, trading company executives told the India Energy Week conference that they see opportunities in crude oil, refined fuels and liquefied natural gas (LNG).
“We see a huge opportunity in India,” Trafigura India CEO Sachin Gupta said, noting strong demand for diesel, gasoline and LPG, adding that India would buy “a significant amount” of LNG.
Gupta expects India’s oil demand to grow from about 5 million barrels per day today to nearly 9 million barrels per day by 2050.
On Friday, Trafigura said it signed a “landmark crude oil supply agreement” with Bharat Petroleum Corp to supply Iraqi Basra and Oman crude to the Indian state-run refiner. BPCL has also signed a long-term agreement with Total Energies to purchase UAE crude oil.
demand growth
India’s largest refiner Indian Oil Corporation (IOC) last year signed a five-year import agreement with Trafigura to buy 2.5 million tons of LNG in a deal worth $1.3 billion to $1.4 billion.
IOC marketing director SP Srivastava told reporters at the meeting that the company expects annual demand for diesel to grow by 2-3% and gasoline demand by 5-6% by 2030.
IOC President Sani said that at India Energy Week, the IOC signed a preliminary agreement with Paris-based Engie to access LNG and other natural gas trading opportunities in the Asia-Pacific region.
Petronet LNG, the largest natural gas importer, forecasts that LNG imports will increase to 28 million to 29 million tons in 2026 from about 25.5 million tons last year.
Trading giant Vitol expects most of India’s refinery output to be absorbed domestically.
“There is 500,000 barrels (per day) of refining capacity coming online,” Vitol Asia head Kieran Gallagher said. “Most of the product from that capacity will be consumed domestically, outside of the summer season and exports.”
Opportunities for traders also extend to petrochemicals, where supply remains structurally short despite government estimates that production will increase by 29.62 million tons to 46 million tons by 2030.
(Reporting by Mohi Narayan and Nidhi Verma; Additional reporting by Anjana Anil and Tanay Dhumal; Editing by Mayank Bhardwaj, Kirsten Donovan)
