American crude loses ground. This week, the Indian Oil Corporation (IOC), the first Indian public refiner, turned his back on cargoes from the United States to redirect to the Middle East and West Africa. This logistical rebalancing, apparently technical, translates a strategic rocking: rise in energy alliances within the BRICS, decline in the dollar in oil exchanges and affirmation of a new economic order.
In short
- The Indian Oil Corporation voluntarily dismissed American crude in its last call for tenders, favoring cargoes from the Middle East and West Africa.
- This choice is based on specific economic criteria, in particular the tightening of margins, freight costs, and price differences between suppliers.
- India and China gradually reduce their imports of American crude, promoting energy partners who are members of the BRICS such as Russia.
- Beyond a simple logistical arbitration, this energy realignment reflects a transition marked by the search for strategic autonomy within the BRICS.
An apparently economic choice, but a strategic signal in substance
The Decision of the Indian Oil Corporation (IOC), the main Indian public refiner, not to include American gross in his last order constitutes a strong signal, while Russia and Saudi Arabia have chosen to increase their production in October.
While it had bought five million barrels from West Texas Intermediate (WTI) the previous week, the IOC this time favored cargoes from Abu Dhabi (DAS) and Nigeria (Agbami and Usan). This readjustment may seem minor operational, but it marks a strategic turning point.
Here are the Key factual elements of this operation:
- The American crude (WTI) was dismissed for the benefit of barrels from the Middle East and West Africa, a voluntary decision on the part of the IOC;
- Arbitration towards Asia has closed: the rise in prices of the Murban and Dubai, combined with the evolution of freight costs, made the alternatives more competitive;
- IOC decisions rely on strict economic calculations;
- The change of suppliers is not punctual: the previous week, the American crude was still in purchases, but today it is no longer;
- It is not a diplomatic reaction, but a choice of profitability, controlled by imperatives of margin and logistical simplification.
This series of elements demonstrates a shift which exceeds cyclical considerations. The Indian energy supply begins to reflect a logic of diversification where alignment with suppliers of the BRICS becomes more and more visible.
The American crude, yesterday perceived as essential, becomes one option among others, subject to a gross profitability analysis.
A trend fueled by dedollarization and trade tensions
In parallel, China, another pillar of the BRICS, has almost ceased its imports of American crude this year, a collapse widely attributed to the multiplication of customs duties imposed by Washington. These tariff barriers have destroyed the margins, pushing Beijing to turn to less restrictive suppliers, notably Russia.
Also in India, imports of American oil fell sharply in August, while the Russian volumes were gaining ground.
Beyond trade flows, the very logic of oil transactions evolves. The usual petrodollar framework is called into question by an exploration of alternative mechanisms within the BRICS alliance: regulations in local coins, independent compensation platforms, and explicit desire to get out of the dollar in certain energy transactions.
Trump brings the Brics despite himself with his sanctions. Far from an ideological boycott, the IOC approach fits into a context of strategic optimization. If the economic and logistical conditions change, the American crude will be able to seduce again. In the meantime, the Asian market explores other alternatives, more direct, more flexible, and less politicized.
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