India increases VGO shipments to the US, IOC resumes gasoil exports  

Quantum Commodity Intelligence - India has stepped up shipments vacuum gasoil (VGO) to the US this year in an unusual trade flow for the oil product as the West seeks alternatives to replace Russian supplies, according to a Reuters report published Friday, citing traders and data analytics firms.

The report said that global trading houses Vitol and Trafigura have bought one cargo each of VGO from Indian refiner Nayara Energy via tenders at premiums ranging from $10- $15/b over Dubai crude quotes.

At these premiums, the cargoes, to load from India's Vadinar port in December, are likely to head to the US or Europe, sources told Reuters.

Prior to this, an Aframax tanker Shanghai Dawn loaded at least 80,000 mt of VGO from Reliance's Jamnagar refinery, arriving in the US late October to early November, shipping data from Vortexa and Refinitiv showed.

VGO, on a refined products basis, is typically priced on what is referred to the 70:30 formula, which is 70% of the price of gasoil and 30% gasoline.

On Friday, Quantum assessed Jan23 cash Dubai at $91.04/b. Benchmark cash 10ppm gasoil, basis Singapore, was assessed at $135.50/b, while spot 92 Ron gasoline was valued $95.71/b

The United States and Canada banned Russian oil imports shortly after Moscow's invasion of Ukraine, while sanctions from the European Union on Russian crude and oil products imports will take effect on 5 December and 5 February, respectively.

Meanwhile, Indian Oil Corp has offered one diesel cargo for loading in early December, its first export in almost three months, noted the report.

The tender, for up to 16,460 mt of diesel loading from Paradip will close on 11 November, with bids valid until the close of business the same day.