Indian refiners have struck deals for the purchase of some 60 million barrels of Russian crude oil, to be delivered in April, Bloomberg reported today, citing unnamed sources familiar with the developments.
The cargoes were snapped at premiums of between $5 and $15 per barrel, the sources noted, suggesting the thirst for Russian oil in the world’s third-largest importer remains strong despite the swing from heavy discounts to a premium to the global benchmark.
Bloomberg, for its part, noted that the contracted volumes, while comparable to what Indian refiners bought from Russia this month, were a twofold increase on imports in February. In February, however, the United States had not yet issued a sanction waiver for Russian crude already loaded on tankers as of March 5. Washington issued the waiver to ease the price pain for importers such as India.
Now, it seems that Indian authorities expect the waiver to be extended, seeing as supply from the Middle East is nowhere near to coming back as hostilities continue. Recent reports that the U.S. has made a ceasefire proposal to Iran have pressured oil prices, but this effect may be temporary unless words are followed by action.
After the U.S. issued the sanction waiver, a race began for Russian oil cargos at sea, with several tankers even diverting from China to supply their cargoes to Indian buyers, according to shipping data from earlier this month. In just the first two weeks of March, he volume of Russian crude on the water fell by more than 20 million barrels, which is equivalent to a drawdown rate of over 2 million barrels per day, Vortexa’s chief economist reported on March 13.
As a result of the rebound in Russian oil imports, the country could this month return to the number-one supplier spot, after sanctions replaced it with Iraq in February, Reuters reported earlier this month, citing analysts.
By Irina Slav for Oilprice.com
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