India's biggest oil buyer was forced into the spot market — long Indian Oil as crude prices fall
India's biggest oil refiner was forced to buy a record amount of oil on the open market because Middle East supply routes were upended. Now that peace talks are starting and the fear premium is evaporating, this massive buyer is positioned to benefit from falling prices.
Idea
Indian Oil Corp just bought a record share of its crude from the spot market because the Iran crisis wrecked its usual supply chains. Now that Trump has called off the attack and talks begin Monday, the war premium is draining from oil prices. When your biggest input cost (crude) drops but your product demand stays intact, your profit margins expand dramatically. A state-backed refiner that was forced to buy at peak fear is now sitting on inventory that gets cheaper to replace by the day.
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News sources
- Indian Oil Corp boost spot oil buy amid Middle East crisis - Reuters — Google News / Reuters
- Indian Oil Buys Record Spot Market Crude on Mideast Supply Hit — Bloomberg