India's Giant Role In Driving Up Oil Prices

At least 18 of India's 23 refineries operated at more than 100% of nameplate capacity last month, up from just eight in August, according to several refinery officials with knowledge of the matter.

Oil refiners in the world's third-biggest crude importer are stepping up purchases as they strive to meet annual production goals, giving prices another tailwind as they march toward $100 a barrel.

At least 18 of India's 23 refineries operated at more than 100% of nameplate capacity last month, up from just eight in August, according to several refinery officials with knowledge of the matter. Average run rates across the plants were 101% in December, compared with 87% in August, they said.

The state-run processors -- Indian Oil Corp., Bharat Petroleum Corp. and Hindustan Petroleum Corp. -- are reaching out to term-contract suppliers including Saudi Arabia and Iraq for extra barrels or buying on the spot market, said the officials, who asked not to be identified as the information is private.

The big three, along with Mangalore Refinery & Petrochemicals Ltd., which together account for 65% of India's processing capacity, are playing catch up after lagging behind production targets in the first nine months of the fiscal year through March as the virus hurt fuel demand. Oil imports rose to the highest in a year in December and the momentum is continuing this year even as the omicron variant weighs on diesel and gasoline consumption.