ONGC Chief Puts 60%-Plus of India's Oil Buying Down to Price
India's spot crude purchases from the US, Venezuela and elsewhere are set cargo-by-cargo on price, ONGC's chairman said, putting the price-driven share of imports above 60 per cent.
ONGC chairman and CEO Arun Kumar Singh said at least 60 per cent plus of India's crude oil imports is a function of the price in the delivery month or M+2, with spot cargoes decided cargo-to-cargo rather than by politics.
The world's third-largest oil importer buys most of its crude the way a trading desk buys anything else: on the number in front of it. That was the message from Arun Kumar Singh, chairman and chief executive of India's state-owned Oil and Natural Gas Corporation, speaking to Indian media after the company's annual general meeting.
"Imports are decided by the price, except for term crudes," Singh said. "Now term crudes are gradually going down. Spot crudes are mostly decided cargo-to-cargo based on price." Pressed on volumes, he offered a figure rather than a forecast: "How much will be imported, we don't know. But it looks like at least 60 per cent plus of India's oil imports is a function of the price in that particular month or M+2."
What "M+2" actually means for a refiner's buying desk
The jargon matters, because it explains why Indian refiners look opportunistic to outsiders. A term contract locks in volumes with a producer over months or years, usually priced off an official selling price formula. A spot cargo is a one-off purchase, negotiated for a specific parcel of crude on a specific vessel. "M+2" refers to pricing set against the month of loading or delivery plus two months out — the window in which a cargo's economics are actually fixed.
If, as Singh describes, the term book is shrinking while the spot book grows, then the composition of India's crude slate becomes a rolling function of relative discounts rather than of long-standing supplier relationships. A cargo from the United States wins when the freight-adjusted delivered price beats the alternative; a Venezuelan barrel wins on the same arithmetic. Neither is a statement of alignment. That is the substance of Singh's claim, as reported by Baystreet.
Geopolitics as a cost, not a constraint
Singh was blunt about the limits of political pressure on flows. Supply, he said, is not the problem — India will always find crude to import. What geopolitical upheaval does is trap term supply in the Persian Gulf and raise the friction cost of moving barrels, not remove the barrels from the market.
"It is some geopolitical issue which is causing trouble, and ultimately economics prevail," Singh said. "Geopolitical disturbances could be for some months or years, but ultimately world economy prevails."
That framing is worth taking seriously, because it is the operating assumption of the buyer rather than the theory of an observer. Sanctions and shipping risk work by widening discounts and lengthening voyages. They rarely destroy demand for a barrel that can be delivered at a workable price. For governments trying to use crude flows as a lever on India's foreign policy, that is an uncomfortable read: the pressure shows up in the price, and price is precisely the variable that keeps the cargoes coming.
Import dependence is the number that has not moved enough
Singh acknowledged the structural point behind all of this. India's dependence on imported primary energy has declined, but the country remains highly dependent — which is why a state-owned upstream producer's chief executive spends his post-AGM remarks talking about other people's crude.
For ONGC itself, the tension is direct. Domestic production replaces imported barrels one for one at the national level, but the company also sits inside a system whose refiners are increasingly indifferent to where a cargo comes from as long as the delivered economics work. A shrinking term book means less predictability for planners and more volatility in the crude slate that refineries are configured to process. Sulphur content, density and yield all vary by grade; a refinery optimised for one diet takes a margin hit running another.
The read-across for oil markets and equity investors
A shrinking term book means less predictability for planners and more volatility in the crude slate that refineries are configured to process.
If more than 60 per cent of Indian import volumes are effectively price-elastic on a monthly basis, then India functions as a swing buyer in the physical market — the marginal bidder that sets the floor under discounted grades. Producers offering distressed barrels have a reliable outlet; producers relying on term relationships have less pricing power than the contract implies. That dynamic cushions the oil price against sanctions shocks and, in the other direction, means Indian demand can vanish from a given supplier's order book within a month or two when a competing discount appears.
Broad equity markets were not trading the story on the day. As of the last trade at 13:47 GMT on Sept. 1, 2026, the S&P 500 tracker SPY was at $761.78, down 0.69% from the previous close of $767.05, with the Nasdaq 100 proxy QQQ at $707.47, off 1.30%, and the Dow tracker DIA at $528.92, down 0.50%. The session's tone was set by technology, not crude.
What to watch next
Three things will test Singh's thesis. First, whether the term share of Indian imports keeps falling — a shrinking term book is the mechanism that makes the price-driven majority grow. Second, whether Persian Gulf term supply becomes untangled, which would pull volume back toward contract barrels and reduce India's role as the market's discount buyer. Third, whether the discounts on sanctioned or politically awkward grades narrow: the moment the price advantage disappears, so does the commercial case that Singh says overrides everything else.
His argument, stripped down, is that politics sets the discount and economics spends it. On that logic, the way to change what India buys is not to lobby New Delhi but to change the number on the cargo.
Key facts
- Price-driven share of imports: At least 60 per cent plus, per ONGC's chairman
- Speaker: Arun Kumar Singh, chairman and CEO, ONGC
- Pricing window cited: Delivery month or M+2
- S&P 500 tracker (SPY): $761.78, -0.69%, as of 13:47 GMT Sept. 1, 2026
Frequently asked questions
What did ONGC's chairman actually say about India's oil imports?
Arun Kumar Singh, chairman and CEO of Oil and Natural Gas Corporation, said imports are decided by price except for term crudes, that term crudes are gradually declining, and that spot crudes are decided cargo-to-cargo on price. He estimated that at least 60 per cent plus of India's oil imports is a function of the price in the delivery month or M+2.
What is the difference between term and spot crude?
A term contract commits a buyer and producer to volumes over an extended period, usually priced off a formula such as an official selling price. A spot purchase is a single cargo negotiated for a specific parcel and vessel, priced on the day. Singh said India's term share is shrinking while spot buying, decided cargo-by-cargo, grows.
What does 'M+2' mean in oil pricing?
M+2 refers to pricing a cargo against the month of loading or delivery plus two months forward. It is the window in which the commercial terms of a spot parcel are effectively fixed. Singh used it to describe when the price that governs the majority of India's import decisions is actually set.
Does this mean sanctions have no effect on India's crude buying?
Singh's argument is that geopolitics changes the price rather than the availability. He said supply is not an issue because India will always find crude to import, and that geopolitical disturbances may last months or years but the world economy ultimately prevails. Sanctions typically work by widening discounts and lengthening voyages, not by removing barrels.
Which suppliers did Singh mention?
He referred to spot cargoes from producers such as the United States and Venezuela as examples of purchases driven by prevailing cargo and oil prices. The point was that grade selection follows delivered economics rather than political alignment, so any producer offering a workable freight-adjusted price can win Indian volume.
How dependent is India on imported energy?
Singh said India's dependence on primary energy imports has declined but remains high. That is why the chief executive of a state-owned domestic producer spends his post-annual-meeting remarks discussing the pricing of imported crude: the import bill, not domestic output, still dominates the country's energy economics.
Sources
Photo: Calistemon · BY-SA 4.0 — source
