State-run refiners in India, like Indian Oil Corp (IOC) and Bharat Petroleum Corp (BPCL), are securing Russian oil for January shipments. They are doing this mainly because of the attractive discounts available. Reports suggest that BPCL has bought four cargoes, two each of Russian Urals and CPC oil, at a discount of $6-$7 per barrel compared to Brent prices.
IOC is also in on the action, consistently purchasing Russian oil that complies with international sanctions. This comes after the U.S. imposed sanctions on major Russian oil players like Rosneft and Lukoil in October. Interestingly, BPCL chose not to purchase any Russian oil in December, but it seems they are back again for January. However, another source hints they may not buy more this month, as they have other suppliers to meet their needs.
In contrast, other state refiners, such as Mangalore Refinery and Petrochemicals Ltd, and Hindustan Petroleum Corp, have halted their purchases of Russian oil altogether.
Nayara Energy, partially owned by Rosneft, is exclusively processing Russian oil, especially as other suppliers opted out following sanctions from the UK and EU. Meanwhile, Reliance Industries, which runs the world’s largest refining complex, is set to process any oil shipments coming in after November 20, as part of a deal with Rosneft focused on the Indian market.
This shift in the oil market highlights how geopolitical events can reshape trade dynamics. While India continues to adapt, the international community watches closely. Statistically, the demand for oil from the Russian market has been fluctuating. According to a recent report, the global refinery throughput hit an all-time high in 2023, reaching around 81.8 million barrels per day. This drives the need for diversifying supply sources.
As we look at these developments, it’s clear that India is negotiating a complex landscape, balancing economic needs with global political pressures.
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