Thread by @KushalSinha001

A thread on the recent developments in the world of #CrudeOil and what are the major producers and consumers doing. Long thread.

The WTI (Texas) oil went into -ve territory. I know many of you reading this went bat crazy about it, even if you did not have anything to do with it.

As the prices went -ve, many started saying that GoI should stock its Strategic Petroleum Reserves (SPRs).
Some details about our SPRs-
We currently have 3 sites at
Vizag,
Mangalore
and Padur
These sites currently have 37 million barrel of Crude Oil.

SPRs of 🇮🇳 back in June 2018 had commenced work for 2nd phase of SPR at Chandikhol and Padur. The 3rd Phase will be at Bikaner and Rajkot.

After commissioning of the 3rd phase (also filling up the caverns) we would enable a 30 days crude reserve, exclusively by the govt

Our reserves can last for 9 days, which is nothing as compared to the recommended 90 days by the IEA.

SO DID WE GRAB THE OPPORTUNITY TO BUY OIL? Yes, but we did not buy WTI which was in -ve instead other grades. We placed an order of Crude worth $670ml at $30/Barrel from 🇦🇪& 🇸🇦

Currently, 19million barrel of gulf oil was transferred from Indian refiners to SPRs are the refiners no longer needed em.
Some oil is on its from gulf, they have till 3rd week of May to unload the Crude from the VLCCs from Mangalore port, as unloading stops during monsoon

WHICH REFINER TRANSFERRED WHAT?
1) Hindustan Petroleum transferred 400K of Iraqi Basrah Light Crude to fill Vizag caverns which is already stories 🇮🇶 oil.
2)🇦🇪 ADNOC leased 1/2 of nearly 11 million barrels of Mangalore SPR
3)IOC diverted 2mil barrels of 🇸🇦 and 5.7 mil of 🇦🇪

4) Mangalore Refineries Ltd transferred 6 mil barrel and Bharat Petroleum 4.6 mil barrel of 🇸🇦 oil.
5) ADNOC leased 1/2 of Padur's facility and 🇸🇦 Aramco leased quarter of the same.

Many suggested that we should also rent VLCC (tankers) for storing Crude Oil.
Well, 🇮🇳 did that but at a very high cost. IOC floated a tender to hire a VLCC and a Suex Max tanker for 6 months !!

Usually oil tankers are hired to 30/60 or 90 days at max !

Since consumption is ↘️
our refiners hve started 2 export products.
1.50,000 tonnes of gasoline by IOC
2.130,000 tonnes of diesel &
3.25,000 of gas by Manglore Ref.
Also, refineries are running at 50% of capacity, contrary to 70-75% on usual days. This touched 30% they hv 2 shut

AS AN INDIAN, I HAVE TO TALK ABOUT 🇨🇳So what were they doing?

Reports suggest that they had doubled stock-pilling oil for their reserves.
65% of their reserves are already full (THIS IS A GOOD MARKS, AS 70% IS WHEN THE CAVERNS ARE CONSIDERED TO BE FULL, that's the red line)

Back in 2019, they had 83 days worth oil ie 1.15 billion barrels. Imports for March rose by 4.5% to 9.6million bpd.
Reason ? 🇸🇦 Has sweetened the deal by giving heavy discounts on oil to its asian customers.

🇸🇦 to 🇨🇳 1.7million bpd (16% share in Chinese import)
🇷🇺 to 🇨🇳 1.6million bpd (largest nom OPEC)
🇧🇷 to 🇨🇳 0.8million bpd (overtook Oman)
Interestingly, China is also experimenting with European Crudes like Balder, Flotta and Chest But crudd. These are substitute for 🇧🇷 & 🇷🇺 oil

For the 1st time, Guyana will export oil and that will head to 🇨🇳. We will talk about oil in Guyana 🇬🇾 and how ONGC VIDESH missed a good opportunity.
China has also increased purchases of Kazak CPC Crude at $5/b which include freight cost. From 0.5 mil tonnes to 5million tonnes

Regarding USA, they need the prices of Oil be $50 and above, thats their breake even point. And to make an independent oil well (in Texas) economically viable, they need to pump 12 barrels/day, and most of them are pumping 10 barrel/day.

I guess that's enough for today !