As Moscow is offering deep discounts on its crude oil Amidst its boycott by the international community due to the invasion of Ukraine, India According to a Bloomberg report, Rosneft is considering buying more low-cost Russian oil from PJSC. These deals, if closed, would be over and above purchases already made in India through other deals.
The report quoted sources as saying, “State processors are collectively working on finalizing and securing new six-month supply contracts for Russian crude in India. Cargo demand from Rosneft on a distributed basis.” The seller is ready to handle shipping and insurance matters.” It added that the volume and pricing details are still being negotiated with Indian banks, which are all set to fully finance the cargo.
India imports more than 80 percent of its crude oil requirement. The country imported 193.5 million tonnes of crude oil in the current financial year till February at a cost of $105.8 billion. Crude oil in the country mainly comes from the Middle East and America. The country bought only 12 million barrels of oil from Russia in the whole year 2021, which is only 2 percent of its total imports. India’s own domestic production is much more than that.
In April, External Affairs Minister S Jaishankar had said, “When oil prices rise, it is natural for countries to look for good deals for their people… I’m pretty sure if we waited 2-3 months.” And looking at the big buyers Russian gas and oil, I suspect that the list will not be any different than before and we will not be in the top-10.
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.
India will need lower crude oil prices domestic petroleum prices Under check which has already crossed Rs 100 per liter in Delhi and even more in some other states. The lower rate can keep inflation under check as costly petroleum affects the prices of other commodities and hence, there is room for RBI not to raise interest rates.
Retail inflation in India stood at an eight-year high of 7.79 per cent, well beyond the Reserve Bank of India’s (RBI) target range.
Access to cheap crude is already driving the country’s oil imports, which grew by nearly 16 per cent in April compared to last year. The share of oil from the Eurasian region, which includes Russia, rose to 10.6 percent in April, up from 3.3 percent a year earlier, according to a Bloomberg report.
Brent crude prices climbed to $120 a barrel on Monday after Saudi Arabia raised crude prices for July amid doubts that an increase in OPEC+ monthly production target would help ease tight supplies. Russia had offered a discount of $35 a barrel on crude oil prices in April.
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