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India avoids Russian oil over sanctions risk, Bloomberg

India avoids Russian oil over sanctions risk, Bloomberg Photo: Indian state-owned refineries avoid Russian oil due to sanctions risk (Getty Images)

The state-owned oil refineries in India are avoiding contractual deliveries of Russian oil due to the increased sanctions by the US, according to Bloomberg.

The largest state-owned oil refinery, Indian Oil Corp, is likely to reduce the volumes of crude oil obtained under the so-called spot contracts.

Meanwhile, Bharat Petroleum Corp and Hindustan Petroleum Corp have decided not to commit to firm purchases of contractual oil for the next fiscal year.

Three refineries negotiated with the Russian Rosneft PJSC for the acquisition of around 500,000 barrels per day, equivalent to one-third of India's daily imports. They aimed to reduce dependence on spot purchases, which can often be more expensive.

What are the prospects for Russian oil supplies to India

"Russia is still the biggest supplier to India, but there are signs refiners are buying more from other producers, including Saudi Arabia," according to the news outlet.

State companies are also seeking crude oil contracts from the Middle East and West Africa, but deals are likely to be more expensive than Russian oil.

It is expected that state oil refineries will meet 40% of their crude oil needs in the financial year starting on April 1 through one-time purchases or spot deals. This means that large volumes of oil from Russia may still be coming to India.

Last year, Indian Oil entered into a series of agreements with Rosneft, Sakhalin-1 LLC, and Gazprom Neft PJSC for the extraction of 24.5 million tonnes, which will conclude on March 31.

Sanctions and export of Russian energy resources

Recently, it became known that the overall export of Russian oil has risen to the highest level in four months.

Meanwhile, after a two-month hiatus, India has resumed the import of Russian Sokol oil.

Two oil tankers ceased their activities near the shores of Greece a few days after the US imposed new sanctions on 14 Russian vessels. According to Bloomberg, the vessels NS Creation and Zaliv Amurskiy halted the transshipment of oil cargoes in the Laconian Gulf, south of Greece.