Indian state refineries weigh options for Russian oil supplies after sanctions - Bloomberg
Kyiv • UNN
Indian state-owned refineries are considering continuing to purchase discounted Russian oil, relying on smaller suppliers after US sanctions against major energy giants. Companies are awaiting government guidance and evaluating options, as four sanctioned companies accounted for over 80% of India's Russian oil imports in 2024.
Indian state-owned refineries are considering continuing to purchase discounted Russian oil, relying on smaller suppliers instead of energy giants PJSC Rosneft and PJSC Lukoil, which were blacklisted by the US last week, Bloomberg reports, writes UNN.
Details
Since the announcement of the new package of US sanctions, refineries, including Indian Oil Corp., Bharat Petroleum Corp., and Hindustan Petroleum Corp., have refrained from supplying Urals crude, the benchmark Russian grade. According to refinery executives, they are awaiting government guidance and weighing their options.
With other major producers, PJSC Surgutneftegaz and Gazprom Neft, previously blacklisted, refiners are trying to understand how much and at what price they can purchase from non-sanctioned Russian companies, executives said. They are also trying to understand how much Rosneft oil will be supplied through other companies.
According to Kpler data, in 2024, the four sanctioned companies collectively accounted for more than 80% of India's Russian oil imports.
Indian refineries would typically be in active negotiations with Russian oil suppliers this week, preparing for November shipments and December deliveries, the publication writes.
Instead, a sharp drop in Russian oil supplies is expected, with private refiner Reliance Industries Ltd. being the most affected, as it has been purchasing Urals crude under a term contract with Rosneft for most of this year. After Washington unveiled its sanctions plan, Reliance, until now the largest buyer of Urals crude in India, rushed to buy alternative crude grades from the Middle East and the US, following the example of its state-owned competitors.
The only exception in India could be Nayara Energy Ltd., which is backed by Rosneft and is already under European and UK sanctions. The company has shown no signs of reducing its purchases of Russian oil.
Buyers in China, Russia's main client, have long shown a willingness to turn a blind eye to sanctions, but even there, large state-owned companies have refrained from purchases in recent days due to new risks, the publication writes.
India is balancing the risk of secondary sanctions and the need to conclude a trade agreement with the US with the risks associated with weakening such necessary ties with Russia, the publication writes. According to company executives, state-owned refineries have not yet received instructions from the government.
Although the four sanctioned suppliers account for the lion's share of Indian imports, there are other, smaller producers in Russia, including PJSC Tatneft and Sakhalin Energy.