India’s Biggest Refiner Partners with World’s Top Crude Trader

October 29, 2025

India’s biggest refiner, state-held Indian Oil Corporation Ltd, is preparing to launch in early 2026 a trading joint venture with the world’s biggest independent oil trader, Vitol, to trade crude and fuels, a source familiar with the plans told Reuters on Wednesday. 

Indian Oil, which together with its unit Chennai Petroleum holds about 31% of all of India’s refining capacity, had discussed a venture with supermajors BP and TotalEnergies and commodity trading giant Trafigura, before picking Vitol for the new trading JV, according to the Reuters source. 

The Indian Oil-Vitol joint venture will be based in Singapore and will operate for a 5 to 7 year period initially. Each of the two joint venture partners will have an exit clause in the agreement, the source told Reuters. 

The rationale behind the JV deal is that Indian Oil looks to reduce costs for procuring crude on the spot market and boost margins by accessing new buyers, the source added. 

Indian Oil expects to need larger crude volumes via established trading channels as the refiner and other state-controlled refiners in India plan to boost their crude processing capacity over the next decade to meet rising fuel demand in the world’s third-largest crude oil importer. 

The Vitol partnership could also become vital for Indian Oil in the near term as the U.S. sanctions on Russia’s top oil companies have stalled crude buying from Russia at Indian refiners, who are halting new orders for Russian crude while awaiting clarity from the government about navigating the new U.S. sanction context. 

Earlier this week, Indian Oil said it will fully comply with international sanctions related to crude oil imports from Russia. 

“We will abide by all sanctions imposed by the international community,” IOC Chairman Arvinder Singh Sahney said on Monday, without commenting directly on the company’s ongoing purchases of Russian crude.  

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