Indian refiners resume purchases of Russian oil at steep discounts
Indian refineries resume oil purchases from Russia (photo: Getty Images)
State-owned Indian refiners Indian Oil and Bharat Petroleum are resuming purchases of Russian crude oil at a discount of about 5 dollars per barrel, Bloomberg reports.
According to the agency's sources, the purchases were made through new trading entities, with payments made in UAE dirhams and US dollars. In such cases, Russia may earn around 40–45 dollars per barrel.
These purchases confirm a cautious return to Russian oil among some Indian refineries, although overall spot buying remains limited as refiners assess the shifting sanctions landscape.
An unspecified number of cargoes was secured at a discount of about 5 dollars per barrel from new trading organizations. For comparison, a month ago, the discount was 3 dollars per barrel.
According to the sources, India's total purchases are unlikely to exceed one-third of their pace for most of this year, meaning they will not surpass 600,000 barrels per day. Purchases by the sanctioned refinery, Nayara Energy Ltd., which is partially owned by Rosneft, usually account for more than half of this amount.
The sources added that some Indian refineries, such as Mangalore Refinery and Petrochemicals Ltd. and HPCL-Mittal Energy Ltd., continue to avoid Russian crude oil altogether.
The private refinery Reliance Industries also stated at the end of November that it would stop processing Russian oil at part of its giant Jamnagar facility.
Sanctions against Russia
On November 17, it was reported that the United States is preparing a new bipartisan bill to increase sanctions pressure on Russia. US President Donald Trump, according to one of the bill's co-authors, Senator Lindsey Graham, has endorsed the document.
In October, the United States imposed sanctions on Russian oil giants Rosneft and Lukoil, as well as their 36 subsidiaries, to pressure the Kremlin into negotiations over Ukraine. Immediately afterward, the market capitalization of both companies fell sharply, forcing them to sell off foreign assets.
Additionally, major state-owned refiners in China suspended purchases of ESPO crude following US sanctions. India is taking the same approach.
According to media reports, approximately 48 million barrels of Russian oil may become stranded at sea due to US sanctions. Ultimately, dozens of tankers will be forced to seek alternative ports of destination.
