Indian state refiners halt oil imports from Chinese cos, sources say

Indian state refiners have stopped buying crude oil from China-linked companies, three sources said, after New Delhi’s recent regulation aimed at restricting imports from countries that it shares a border with.

A logo of Indian Oil is picture outside a fuel station in New Delhi, India August 29, 2016. REUTERS/Adnan Abidi

The new regulation, put in place on July 23, comes after a border clash between India and China that killed 20 Indian soldiers and soured relations between the two neighbors.

Since the new order was issued, state refiners have been inserting a clause in their import tenders on new rules restricting dealings with companies from countries sharing a border with India, the sources said and the tender documents show.

Last week, Indian state refiners decided to stop sending crude import tenders to Chinese trading firm like CNOOC Ltd, Unipec and PetroChina, among others, one of the sources said.

To participate in Indian tenders, the July 23 order makes registration with a department in the federal commerce ministry ‘mandatory’ for any bidders from nations sharing a border with India.

India shares borders with China, Pakistan, Bangladesh, Myanmar, Nepal and Bhutan, but the government statement did not name any specific country.

State refiners, which control 60% of India’s 5 million barrel-per-day refining capacity, regularly tap spot markets for crude.

India is the world’s third biggest oil consumer and importer and imports nearly 84% of its oil needs.