New Delhi: India is looking to double its Russian oil imports, as state-owned refiner Rosneft is eager to pick up more heavily discounted supplies from PJSC as international players turn down a deal with Moscow over the invasion of Ukraine.
People with knowledge of the companies’ procurement plans said state processors are collectively working on finalizing and securing new six-month supply contracts for Russian crude in India.
The goods are being sought from Rosneft on a delivery basis, with the seller ready to handle shipping and insurance matters, he added.
These supply agreements, if terminated, would be separate and on top of shipments that India already buys from Russia through other deals.
Volumes and pricing details are still being negotiated with banks to fully finance all cargo, people who asked not to be identified as discussed are confidential.
He said refiners are increasingly buying directly from Russian companies such as Rosneft as top international traders such as Glencore Plc have closed their deals.
State refiners include Indian Oil Corp, Hindustan Petroleum and Bharat Petroleum, while private processors are Reliance Industries and Naira Energy, which are partly owned by Rosneft.
Procurement activities for state and private companies are carried out independently. Spokespersons of the three largest state-owned companies could not immediately comment when contacted on the matter.
Both state- and private-owned refineries in India are ramping up purchases of Russian crude as sanctions and trade restrictions imposed by the US, UK and EU have driven most buyers to flee and crashed offering levels.
An unprecedented amount of Russian crude was headed to India and China last month as European buyers scrambled for replacements and reached out to the United Arab Emirates for alternatives.
The panic and redeployment of global oil flows has pushed oil up more than 20% since late February when Russia invaded Ukraine.
Refiners in Asia’s second largest oil consumer are enjoying high profits from converting cheap crude oil into fuels that are sold domestically and in export markets to customers in Europe and the Americas. Russian crude, along with other long-term as well as spot purchases from the Middle East and Africa, forms part of India’s overall basket of crude oil feedstock.
People said a possible ramp-up of purchases of Russian crude oil would impact the South Asian country’s spot imports. According to Bloomberg calculations based on trade data, India bought more than 40 million barrels of Russian oil between the end of February and the beginning of May, which is about 20% more than all of 2021 inflows.
According to data from Kpler, Russian oil arrivals in India stood at 740,000 barrels per day in May, up from 284,000 barrels in April and 34,000 barrels a year ago.
While India’s purchase of Russian crude oil is not illegal or in violation of any sanctions, the Biden administration and the EU have put pressure on the country to cut off the Kremlin’s access to oil revenues and funds. has given.
The Asian nation has reiterated that Russian imports amount to less than Europe’s purchases, and account for only a small fraction of the country’s total consumption.
Discounted Russian oil has provided some relief to India – which imports more than 85% of its oil – as inflation skyrocketed as well as rising prices of everything from food to fuel.
Access to cheap crude is already driving India’s oil imports, which grew by nearly 16% in April last year. The share of oil from the Eurasian region, which includes Russia, rose to 10.6% in April from 3.3% a year earlier, according to oil ministry data.
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