The majority of India’s biggest refiners are buying Russian oil from non-sanctioned sellers and traders as widening discounts of Russia’s crudes to benchmarks are tempting the price-sensitive Indian importers, sources involved in the purchases told Bloomberg on Wednesday.
Before the latest sanctions on Russian oil producers Rosneft and Lukoil, India bought from Russia around one-third of all the crude it imported, as it sought cheaper oil.
Amid tense trade negotiations with the United States, India earlier this year was singled out by U.S. President Donald Trump as the main financier of the Kremlin’s oil revenues. At the time, India remained adamant that it would buy the cheapest oil available, regardless of whether it came from Russia or elsewhere.
However, the U.S. sanctions on Rosneft and Lukoil upended all previous plans by Indian refiners, who hastened to withdraw from the spot market for Russian crude in December.
But Bharat Petroleum Corporation Limited (BPCL) and Indian Oil Corporation (IndianOil) have bought Russian crude from non-sanctioned companies for January delivery, at a discount of $6-$7 to Brent crude, reports emerged last week.
Combined, IndianOil and Bharat Petroleum have purchased in recent days 10 cargoes of non-sanctioned Russian crude, including Urals, according to Bloomberg’s sources.
Another state-owned Indian refiner, Hindustan Petroleum Corporation Limited (HPCL), is seeking non-sanctioned Russian oil for January delivery, the sources said.
Private refiner Reliance Industries, the owner of the world’s biggest integrated refining complex at Jamnagar, is a notable absence among Indian refiners in the market for non-sanctioned Russian crude, according to Bloomberg.
Reliance, which operates the 1.4 million barrels per day (bpd) Jamnagar complex, has a long-term deal with Rosneft to buy almost 500,000 bpd. Reliance was India’s single biggest buyer of Russian crude, until now, but it halted all purchases of oil from Russia last month, after the sanctions on Rosneft and Lukoil.
By Tsvetana Paraskova for Oilprice.com
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