India Seizes Opportunity: Non-Sanctioned Russian Oil Now Available at Unprecedented Discounts

India’s state-run refiners, Indian Oil Corporation (IOC) and Bharat Petroleum Corporation (BPCL), are buying Russian crude oil for January delivery. This move comes as they are attracted by discounts and abundant supplies from non-sanctioned sources.

Reports indicate that these refiners have secured multiple cargoes, priced about $5 per barrel lower than Dated Brent. This is a slight drop from the previous month’s discount of $3 per barrel. However, the total amount India is buying remains cautious and shouldn’t exceed 600,000 barrels a day. Notably, Nayara Energy, which is partly owned by Rosneft, typically handles over half of these purchases.

Experts suggest that despite the discounts, Russia could see earnings between $40 to $45 per barrel after considering freight costs. Payments are being made using UAE dirhams and US dollars, further highlighting the complexities of international trade.

IOC has been actively purchasing non-sanctioned Russian crude for several weeks now, although BPCL hasn’t taken any shipments recently. This return to Russian oil reflects a cautious strategy among some Indian refiners as they navigate changing sanctions and trade relationships, particularly with the U.S.

Four major Russian oil producers, including Rosneft and Lukoil PJSC, are under U.S. sanctions, which adds layers of scrutiny for banks dealing with Indian refiners. This could change India’s usual supplier dynamics, potentially allowing countries like Saudi Arabia to regain market share.

Interestingly, some Indian refiners, such as Mangalore Refinery and HPCL-Mittal Energy, are completely avoiding Russian oil, while Reliance Industries has stopped processing it altogether. This varied response shows how different companies are handling the international pressure surrounding Russian trade.

As of late 2023, the global energy landscape remains fluid. According to recent statistics, dependence on Russian oil has decreased among many nations, and India’s careful approach illustrates how geopolitical tensions influence economic decisions.

For more on the current situation regarding Russian oil and its implications on global markets, check out the latest reports from trusted sources like Bloomberg.

Source link

Bloomberg wire,India-Russia,Russian Oil