Indian Refineries Slashing Spot Tenders as Russian Oil Flows Back

Indian refiners will issue fewer tenders for the purchase of crude oil on the spot market in the coming month as Russian supplies bounce back, Reuters has reported. Previously, Bharat Petroleum CFO revealed that middlemen who supply Russian oil stopped offering cargoes following U.S. sanctions imposed by the Biden administration targeted Russian producers, tankers and insurers. The sanctions targeted Surgutneftgas and Gazprom Neft, two Russian oil firms that handle 25% of Russian oil exports. The two companies shipped an average of 970,000 bbls a day in 2024. Bharat Petroleum and other Indian state refiners buy Russian oil in the spot market, mainly from traders.

Freight rates to ship Russian Urals from Baltic ports to India jumped 20% in February to $7 million to $8 million per voyage after the Biden administration imposed harsher sanctions on Russian crude. Russia’s provisional February loading plan for western ports was revised up by 19% to 1.9 million barrels per day, Reuters calculations showed. Russian refineries are processing more crude oil in the hope of boosting fuel exports after the Biden administration imposed fresh sanctions on Russian crude.

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Last month, India pledged India to boost oil and gas imports from the U.S. in an effort to reduce the trade imbalance between the two countries. India made the promise after Prime Minister Narendra Modi visited the country and met U.S. President Donald Trump.

Meanwhile, India’s oil demand growth is estimated to have exceeded China’s for the first time in 2024, and is expected to do so again in 2025. According to Kang Wu, global head of macro and oil demand research at SPGCI, India’s oil demand in the current year grew by 180,000 barrels per day, surpassing China’s growth at 148,000 bpd. India’s oil demand is expected to increase by 3.2% Y/Y in 2025 compared to a 1.7% clip by China.

By Alex Kimani for Oilprice.com

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