The rising spread between North Sea Brent and Dubai crude has prompted Indian oil marketing companies to rethink the product mix on the back of tight financials. Brent crude, otherwise known as soft crude with low sulphur, is preferred since it is easy to refine, while Dubai crude is high-sulphur heavy crude, and more difficult to refine. Currently, spot Brent is ruling higher in the range of $110-112 per barrel while Dubai has softened from $115.71 per barrel in September to $105-106. The spread, which is crucial for the oil companies to decide the mix, has widened from a low of $1.1 per barrel in November to a high of $ 3.59 now. Indian companies trypically have a product mix of about 70 units of Dubai crude to 30 of Brent, but this can get stretched to a Dubai-Brent ratio of 65:35. "We may now procure more Dubai crude which could again shift the mix further in favour of Dubai crude to around 80: 20 if the price of Brent crude keeps moving up," said an official source with a public sector oil undertaking. By the end of third quarter of the current financial year, the projected under-recoveries of oil companies were Rs 1,87,127 crore for the financial year 2012-13 in the wake of high international crude oil prices and sharp depreciation of Indian rupee against the dollar. On the other hand, this spread determines the basis as to which crude flows into Asia, including India, where oil consumption rate is highest. The US-based International Energy Agency in its monthly report in December stated that there have been radical structural changes including an apparent acceleration in the eastward shift of global oil demand growth. "While the United States still leads the top 10, Brazil, Russia, India, China and Saudi Arabia together took five of the next six spots" as per the report. IEA has forecast global oil demand growth for 2013 at 865,000 barrels per day, 110,000 bpd higher than in its previous report, taking consumption to an average of 90.5 million bpd.

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