According to three reports, Indian state refiners will buy 36% less oil from Saudi Arabia in May, indicating increased conflict with Riyadh despite the Kingdom's support for OPEC and allied producers last week. As global oil prices have risen, ties between India, the world's third-largest oil importer and buyer, and Saudi Arabia have deteriorated.

As its economy recovers from the pandemic, New Delhi blames Saudi Arabia and other oil producers for pushing up crude prices. According to three sources, state-run refiners have put orders for 9.5 million barrels of Saudi oil in May, down from the previously expected 10.8 million barrels.

Indian Oil Corp, Bharat Petroleum Corp, Hindustan Petroleum Corp, and Mangalore Refinery and Petrochemicals Ltd purchase 14.8 million barrels of Saudi oil per month on average.

Three sources said the decision to put fewer oil nominations was made on Monday, just two days after a phone conversation between Indian oil minister Dharmendra Pradhan and his Saudi counterpart Prince Abdulaziz bin Salman on Saturday. The Indian firms, Saudi Aramco, and the Saudi oil ministry did not respond to requests for comment.

After the new US administration called on Saudi Arabia, the de facto leader of the alliance, to keep energy affordable for customers, the Organization of Petroleum Exporting Countries and its allies, known as OPEC+, agreed on Thursday to gradually ease their oil production cuts starting in May.

Saudi Aramco, the kingdom's state-owned oil corporation, lifted the official selling price, or OSP, of its oil for Asian markets on Sunday while lowering it for European and American markets.

India advised refiners to look for alternative energy to Gulf oil, which is the country's primary crude source. Tensions between the two countries have risen further after Abdulaziz advised India last month to use the crude stocks it purchased at a discount during the price downturn in 2020. Abdulaziz's answer, according to Pradhan, was "undiplomatic."

To calm the situation, Abdulaziz said last week that Aramco kept regular April oil deliveries to Indian refiners while reducing quantities for other buyers and voluntary production cuts have placed "Aramco in some difficulty with some of its partners."

Saudi Arabia will also phase out its additional voluntary cut in stages by July, according to Abdulaziz.

Meanwhile, Indian state refiners have begun diversifying their crude purchases to include Tupi grade from Brazil, Liza oil from Guyana, and Johan Sevredrup from Norway.

"We've always assumed that crude supply should be dictated by the market rather than artificially regulated," said Arindam Bagchi, a spokesman for the foreign affairs ministry.

OPEC+ has reported slight ease in oil production cuts, he said, but they are still below India's expectations.