This year's turmoil has flipped the playbook. Producers have been pushing more spot cargoes from outside the Gulf - a setup that was unusual before February - nudging buyers toward flexibility instead of fixed volumes. If Indian Oil cuts back on term commitments, it does not automatically mean fewer Middle Eastern barrels. It would lean more on the spot market, keeping the option to tap Gulf supply when prices, freight and availability work, and step back when they do not.
India's largest refiner, which also supplies its Chennai Petroleum Corp. subsidiary with oil, typically finalizes its yearly plan around September. It has not settled on a strategy yet this year because the market remains unstable, the person said. A sizable reduction in term volumes would be a clear shift from current practice.
Saudi Arabia, Iraq and the United Arab Emirates have long been key term suppliers. Indian Oil's deal with Iraq runs on a calendar-year basis, while most other Middle Eastern contracts follow India's fiscal year that starts on April 1.
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The conflict is reshaping plans outside procurement too. Indian Oil has delayed plans to acquire a minimum of two very large gas carriers, the person said, after prices for those ships climbed to about 150 million dollars from roughly 70 million dollars before the war. It has also pushed back a proposed trading joint venture with Vitol Group.
In plain English: Indian Oil plans to reduce some fixed purchases next year, which would tilt more buying toward the spot market. Watch whether non-Gulf spot supply stays abundant, how Strait of Hormuz risks evolve, and how contract calendars - Iraq on a calendar year, most others on India's fiscal year - shape next year's volumes and margins.
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