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Large Indian Refiners Take Russian Oil as Reliance Avoids Trade
Four of India’s seven largest oil refiners have stepped up purchases of Russian oil as substantial discounts make Russian fuel attractive to buyers, even though the large company Reliance Industries Ltd. is holding back from such purchases.
According to sources, state-owned Indian Oil Corp. and Bharat Petroleum Corp. in recent days bought about 10 cargoes of non-sanctioned Russian oil, including Urals. Meanwhile Hindustan Petroleum Corp. is seeking offers for January deliveries.
According to analytics company Kpler, these four refineries, including Nayara Energy, which continues to purchase Russian oil even after being added to the European Union’s sanctions list, accounted for slightly over 60% of India’s oil imports this year.
The Role of Reliance and Other Suppliers
Reliance is absent from this list, having previously been the largest importer of Russian oil in India. According to sources, the corporation is now refraining from Russian oil even under its term contract with Rosneft, which amounts to about 500,000 barrels per day, in an effort to avoid the risks of US or European sanctions.
Smaller refiners, including Mangalore Refinery and Petrochemicals Ltd. and HPCL-Mittal Energy Ltd., have also completely halted purchases of Russian oil.
India has been trying for several months to maintain access to cheap Russian oil while not provoking Washington or Brussels. It is expected that Russian oil imports by the Indian side will decline next year due to Rosneft and Lukoil being added to the blacklist, but trade will remain at a lower level.
Traders say the price of Russian oil is in the range of about $40 to $45 per barrel.
The peak of this year’s purchases in June showed that India imported from Russia more than 2 million barrels per day. It is expected that in December this figure will fall to about 1.3 million barrels per day, and in January the volume will drop further as previous contracts support supplies until the restrictions take effect.
According to experts, Russia is loading oil onto tankers at a rapid pace, but these cargoes are piling up at sea, putting downward pressure on prices and undermining Moscow’s ability to finance the war in Ukraine.
Thus, India continues to carefully balance the economic benefit of cheap Russian oil with possible international risks from sanctions, while reducing import volumes in the medium term.
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