Economy

India rejects another type of Russian oil

According to Russian media, India, the largest buyer of Russian marine oil, has not been buying Russian premium ESPO oil for two months, Kommersant Ukrainian reports

Earlier, India had sharply reduced shipments of another premium grade of Russian oil, Sokol, due to disagreements in oil payments and even fears of Indian buyers after the price ceiling for Russian oil was raised.

Currently, India has not bought ESPO oil exported by sea through the Far Eastern port of Kozmino for two months. While China is the main consumer of Russian ESPO oil (800,000 barrels per day), India has also been a major buyer of this grade. Last year, ESPO supplies to India averaged about 95 thousand bpd, and in the second half of 2022 – 60 thousand bpd.

ESPO is a low-sulphur (less than 0.6%) crude oil grade supplied to the east from fields in Eastern Siberia. The pricing of ESPO has traditionally been based on a reference to Dubai.

India’s gradual abandonment of Russian oil is associated with the US sanctions policy: by purchasing raw materials from Russia, Indian refiners save a little money, but risk falling under US sanctions. In addition, the discounts currently offered by Russia are not significant enough to be worth the risk. Therefore, India is looking for a replacement for Russian oil.

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