Indian state refiners have asked Abu Dhabi National Oil Co (ADNOC) to offer pricing of its crude on a delivered basis to manage costs, three refining sources said, after fresh US sanctions disrupted supplies and caused freight rates to spike.
Refiners in India, which imports over 80 per cent of its oil, have been hit hard by a spike in global oil prices and shipping rates after Washington recently imposed sweeping new sanctions targeting Russian insurers, tankers and oil producers.
The world’s No. 3 oil importer and consumer became the top buyer of discounted Russian seaborne oil after the European Union shunned purchases and imposed sanctions on Moscow following its invasion of Ukraine in 2022.
Russian oil accounted for more than a third of India’s imports last year, but US sanctions are tightening supply, pushing the buyer back to traditional Middle East sources.
While most Middle East crude producers sell oil on a free-on-board (FOB) basis via long-term contracts to Asian buyers, Russian oil traders have been supplying crude to India on a delivered at port (DAP) basis that includes insurance, shipping and other services borne by the seller.
State-owned Indian refiners including Indian Oil Corp, Hindustan Petroleum Corp (HPCL) and Bharat Petroleum Corp have asked ADNOC for DAP price quotes, the sources said.
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