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Reliance faces many hurdles in getting crucial crude delivered as global market struggles
A dearth of heavy crude is forcing one of the world’s biggest buyers to go the extra mile to get the barrels it needs, offering another example of how sanctions and OPEC+ curbs are recasting the supply chain.
Reliance Industries Ltd., India’s largest private refiner, purchased about 2 million barrels of Canada’s Access Western Blend crude from the recently expanded Trans Mountain pipeline, its first such cargo. And although that grade suits processors with sophisticated refineries such as Reliance, there were plenty of unusual logistical complexities that came with the deal.
To get the shipment delivered, Reliance is first having to load it onto four smaller tankers from Burnaby port because of local depth restrictions, according to people with knowledge of the matter. The quartet of cargoes will then be transferred onto a single very large crude carrier, before that vessel makes the more-than-19,000-kilometer voyage to India via the Pacific, they said. An alternative, possible route via the Atlantic would be longer still.
The complex journey reflects underlying changes in the global market that have combined to make supplies of dense and sulfurous crude harder to find. First, US sanctions against Venezuela have been reimposed, cutting that nation’s supplies of heavy crude. At the same time, OPEC+ cutbacks have crimped flows of similar grades, while Mexico, another supplier, is also exporting less. Rounding it off, more heavier barrels from the Middle East are getting used locally for power generation during the hot summer months.
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