India’s biggest state-held refiner, Indian Oil Corporation (IOC), has acquired five December-arriving cargoes of Russian crude from non-sanctioned entities, trade sources told Reuters as India scrambles to replace sanctioned Rosneft and Lukoil deliveries.
The U.S. sanctions Russia’s top two producers sent Indian refiners rushing to replace volumes from these exporters and their affiliates with barrels from other countries, and apparently with Russian barrels moved by unsanctioned entities.
IOC early this week vowed that it would fully comply with international sanctions related to crude oil imports from Russia.
“We will abide by all sanctions imposed by the international community,” IOC chairman Arvinder Singh Sahney said on Monday, without commenting directly on the company’s ongoing purchases of Russian crude.
Still, IOC’s head of finance, Anuj Jain, has said the top Indian refiner would continue to buy crude from Russia if the supply and delivery do not breach the U.S. sanctions.
IOC has bought about 3.5 million barrels of Russia’s ESPO crude at about the same price as the Dubai quotes for delivery at an eastern Indian port in December, one of the trade sources told Reuters, without naming the sellers of the Russian oil.
IOC is also looking to buy 24 million barrels of crude oil from the Americas in the first quarter of next year to replace lost Russian supply, Bloomberg reported earlier this week.
The Indian refiner is looking for cargoes from the United States, Canada, Brazil, and Latin America. Reuters reported IOC was looking for both high-sulfur and low-sulfur grades. The publication cited an unnamed source as saying the invitation for expression of interest aimed to test the appetite of sellers in case it needed to tap the Americas oil market.
India Today reported, meanwhile, that the sanctions are already starting to push Indian refiners’ import bill higher as they switch to costlier grades from sources other than Russia. The switch is also affecting run rates, the publication noted, adding that Russian crude was available at discounts ranging between $8 and $12 per barrel to Middle Eastern benchmarks.
By Tsvetana Paraskova for Oilprice.com
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