India's IOC buys its first cargo of Iraqi Basra Medium oil

SINGAPORE/NEW DELHI: Indian Oil Corp (IOC) , the country's top refiner, has loaded its first cargo of Iraq's newly introduced Basra Medium crude grade, according to ship tracking data from Refinitiv Eikon and a source with knowledge of the matter.

IOC loaded the cargo onto Minerva Kalypso, a suezmax-sized vessel, which left Iraq's southern port of Basra on Jan. 4, the data showed.

The ship is expected to arrive at Chennai port in southeastern India for IOC's subsidiary Chennai Petroleum Corp (CPCL) around Jan. 14.

Iraq's state oil marketing company (SOMO) launched the new sour crude grade in January by splitting existing Basra Light production into two grades to provide better quality stability.

"From this year IOC will get all three grades - Basra Light, Basra Medium and Basra Heavy - depending on the availability with the supplier," the source said, adding that the 1 million barrels of Basra Medium crude would go to CPCL.

Along with Chennai Petroleum, IOC controls about a third of the 5 million bpd of refining capacity in India.

"CPCL has been procuring Basra Light and Basra Heavy crude oil from Iraq and Basra Medium was procured recently for the first time, this is after the introduction of this grade by SOMO supplier to the market for the first time," the company said in a statement to Reuters.

Iraq has increased crude exports by introducing Basra Medium after the Organization of the Petroleum Exporting Countries and its allies agreed to raise output by 500,000 barrels per day (bpd) in January.

"Basra Medium helps fill the gap of a shortage of heavy oil globally due to sanctions on Iran and Venezuela, declining production in Colombia and Mexico and OPEC+ quotas," analytics firm Kpler said.