Indian billionaire seeks replacement for Russian oil - Bloomberg
Photo: Mukesh Ambani (Getty Images)
The largest oil refinery owned by Indian billionaire Mukesh Ambani has started looking for an alternative to Russian oil, Bloomberg reports.
The procurement policy of the Indian company Reliance Industries has come under scrutiny after the EU imposed new restrictions on diesel produced from Russian oil.
According to traders, at the end of last week, Reliance purchased Murban oil from Abu Dhabi, a rare purchase for the company.
Usually, the company buys cheaper grades, such as Russian Urals and heavy Middle Eastern grades. The purchase of Murban immediately after the sanctions package was introduced indicates a possible change in strategy.
According to informed sources, Reliance has started looking for ways to diversify its purchases to reduce its dependence on Russia. So far, Russia remains the company's largest oil supplier this year.
How Reliance profited from war
Reliance and other Indian refiners were among the biggest beneficiaries of Moscow's war against Ukraine.
Europe refused to buy Russian oil, which led to lower prices for its supply. Indian companies actively bought cheap oil and processed it into diesel fuel, which they then sold to European customers. According to Kpler, almost half of Reliance's oil imports this year came from Russia.
Exports to Europe and new risks
About 20% of Reliance's total production, including diesel, was exported to Europe. Now, the company is at the center of pressure from a new package of EU sanctions that will come into effect on January 21 next year.
Although it is too early to talk about a sharp abandonment of Russian oil, traders note the first signs of a search for alternative suppliers in the Middle East.
Reliance will have to find almost 600,000 barrels of oil per day from other suppliers. It is unclear to what extent this will be possible and at what price.
India criticized the new EU sanctions. According to Foreign Minister Vikram Misri, a balance must be maintained when imposing secondary sanctions.
The EU package includes restrictions on Russian oil refined in third countries.
However, Petroleum Minister Hardeep Singh Puri said that India may refuse Russian oil in case of secondary US sanctions.
