Indian state-owned refineries Indian Oil and Bharat Petroleum are resuming purchases of discounted Russian crude oil at about $5 per barrel, Bloomberg reports, writes UNN.
Details
According to the publication's sources, India's total purchases are unlikely to exceed one-third of the level seen for most of this year, meaning they will not exceed 600,000 barrels per day. Purchases by the sanctioned refiner Nayara Energy Ltd., partly owned by Rosneft, would typically account for more than half of that volume.
Taking into account discounts and freight costs, the prices mean that Russia should earn an average of about $40-45 per barrel, sources said. Payments are made in UAE dirhams and US dollars.
IOC, India's largest refiner, has been buying Russian oil from non-sanctioned suppliers for several weeks and has already received some December deliveries. BPCL has not purchased Russian cargoes during this time. IOC and BPCL did not comment on journalists' requests
The purchases indicate a cautious return to Russian oil among some Indian refiners, although the overall volume of spot market purchases remains limited as companies assess the changing sanctions environment. Negotiations between Washington and New Delhi are ongoing, and crude oil supplies remain one of the most difficult issues. The Trump administration has repeatedly criticized India for trading with Russia.
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The four largest Russian oil producers — Rosneft, Lukoil PJSC, Surgutneftegaz, and Gazprom Neft — have been blacklisted by the US, forcing banks working with Indian refiners to tighten scrutiny of any transactions. The tightening of sanctions is also likely to strip Russia of its status as India's top crude oil supplier, paving the way for the return of Saudi Arabia and other suppliers.
Some Indian refiners, such as Mangalore Refinery and Petrochemicals Ltd. and HPCL-Mittal Energy Ltd., still completely avoid Russian oil, sources say. Private company Reliance Industries said in late November that it would stop processing Russian oil at part of its giant Jamnagar refinery.