The immediate suspension of crude oil imports from Russia on the part of India would present a major disruption for global oil markets, Moody’s warned today, following the announcement of a trade deal between New Delhi and Washington.
“Even though India has reduced its purchase of crude oil from Russia in recent months, it is unlikely to cease all purchases immediately which could be disruptive to India’s economic growth,” the ratings agency said in a note, as quoted by the Economic Times.
President Donald Trump broke the news of a deal with India on Monday, saying the U.S. would reduce tariffs on Indian imports in exchange for a commitment on the part of New Delhi to stop buying crude oil from Russia and boost purchases of American oil instead, along with other goods and commodities.
The deal would also grant Indian energy buyers access to Venezuelan crude and maybe even Iranian crude, as suggested by the U.S. president, providing alternatives to Russian crude, which turned the country into India’s single biggest supplier of the commodity over the past four years. Since U.S. sanctions on the two biggest Russian companies shipping crude abroad came into effect last November, however, Indian refiners have been reducing their intake and looking for alternatives.
This month, India is on track to import record-high volumes of crude oil and condensate as refiners boost non-Russian purchases further to replace barrels lost to U.S. sanctions, energy flow tracking firm Vortexa said in a report last week.
India’s crude and condensate imports will likely hit 5.2 million barrels per day (bpd) this month—a new record, as deliveries of cargoes laden with non-Russian oil surged. The jump in non-Russian crude imports is set to more than offset the decline in India’s imports of Russian crude, according to Vortexa.
By Irina Slav for Oilprice.com
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