India is no longer satisfied with Russian oil – the government is starting to look to the Middle East
25 December 16:04
Indian state-owned refineries are considering entering the Middle East oil market as spot supplies from their main supplier, Russia, have declined. The move could support prices for high-sulfur crude, Komersant ukrainskyi reports citing Reuters.
Three large state-owned refiners – Indian Oil Corp (IOC), Bharat Petroleum Corp (BPCL) and Hindustan Petroleum (HPCL) – are facing a shortage of 8-10 million barrels of Russian oil for loading in January.
Refiners fear that problems with the supply of Russian crude on the spot market may continue in the coming months as Russia’s own demand grows and it must fulfill its obligations under the OPEC deal. However, they added that they could use their reserves to meet refining needs in March.
Two Reuters sources said that their companies could buy more oil from Middle Eastern suppliers under option volumes in term contracts or announce a spot tender for high-sulfur crude.
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India and Russia
India is one of the countries that benefits most from not joining the anti-Russian sanctions. Over the years of the full-scale war in Ukraine, it has overtaken China to become the largest buyer of Russian oil. The amount of oil that India buys from Russia has increased from statistically insignificant levels in the 2021-2022 fiscal year to more than 1.5 million barrels per day in 2023-2024, which is one third of all oil purchased by the country.
India also cooperates with Russia in military-technical terms.
Most of the supplies from the Russian state oil company Rosneft are tied to an agreement with the Indian private oil refiner Reliance Industries
However, Russia’s spot oil exports have declined since November as refineries reopened after the maintenance season and bad weather disrupted shipping.
In addition, within the framework of OPEC, Russia has promised to further reduce oil production from the end of 2024 to compensate for the previous overproduction.
