New Delhi: The love affair with Russian oil appears to be losing its charm for Indian refiners as discounts have come down from a peak of $25-30 to $4 a barrel, with seller benchmark Brent crude and Not taking into account shipping rates to cover the difference. Western price range, people in the know told TOI.
Russian crude now accounts for about 40% of India’s total oil imports, up from less than 2% earlier. ukraine Clash. Indian refiners started tapping Russian crude as sellers started offering steep discounts as Western buyers shied away from barrels that had been banned by the US and the European Union. RussiaIncluding its energy exports.
Indian refiners buy Russian oil on a delivery basis, with the seller arranging shipping and insurance to avoid violating sanctions. This factor became more important after the G7 set a price cap of $60 for Russian energy exports by sea route, thereby obtaining shipping or insurance – 60% controlled by European entities – for oil sold above the cap. It got difficult.
“This and scattered purchases by Indian refiners – especially state-run entities that are the biggest buyers – are taking advantage of sellers of Russian oil. They’re charging $11-19 a barrel freight from the Baltic Black Sea ports, or almost double the normal, while the invoice price of crude oil is being quoted at $1-2 below the limit,” said a person involved in the trade.
Indian buyers may soon lose the discount if oil prices fall further and narrow the gap with the G7 price range, he said. “Three little-known agencies dominate the shipping and insurance bids issued by Russia for shipments to India. These are not linked to global benchmarks. So they can easily play tenders and bring the net cost of Russian oil closer to benchmark crude – currently $75-76,” he said.
Moscow is believed to have built up a tanker fleet owned by dubious shipping companies that is believed to be carrying about a quarter of Russian crude.
Collective bargaining is the only way to protect Indian interests – especially by state-run refiners. “China is fed up with Russian oil and cannot consume more because its economy is not picking up. India remains the only major buyer where consumption is growing at 5-6% annually. This should be taken advantage of for term deals,” he said.
An indicator of the benefits of the term deal is IndianOil’s arrangement with the Russian major rosneft For 6 million tonnes of crude, the discount has reportedly been fixed at around $8 per barrel.
Russian crude now accounts for about 40% of India’s total oil imports, up from less than 2% earlier. ukraine Clash. Indian refiners started tapping Russian crude as sellers started offering steep discounts as Western buyers shied away from barrels that had been banned by the US and the European Union. RussiaIncluding its energy exports.
Indian refiners buy Russian oil on a delivery basis, with the seller arranging shipping and insurance to avoid violating sanctions. This factor became more important after the G7 set a price cap of $60 for Russian energy exports by sea route, thereby obtaining shipping or insurance – 60% controlled by European entities – for oil sold above the cap. It got difficult.
“This and scattered purchases by Indian refiners – especially state-run entities that are the biggest buyers – are taking advantage of sellers of Russian oil. They’re charging $11-19 a barrel freight from the Baltic Black Sea ports, or almost double the normal, while the invoice price of crude oil is being quoted at $1-2 below the limit,” said a person involved in the trade.
Indian buyers may soon lose the discount if oil prices fall further and narrow the gap with the G7 price range, he said. “Three little-known agencies dominate the shipping and insurance bids issued by Russia for shipments to India. These are not linked to global benchmarks. So they can easily play tenders and bring the net cost of Russian oil closer to benchmark crude – currently $75-76,” he said.
Moscow is believed to have built up a tanker fleet owned by dubious shipping companies that is believed to be carrying about a quarter of Russian crude.
Collective bargaining is the only way to protect Indian interests – especially by state-run refiners. “China is fed up with Russian oil and cannot consume more because its economy is not picking up. India remains the only major buyer where consumption is growing at 5-6% annually. This should be taken advantage of for term deals,” he said.
An indicator of the benefits of the term deal is IndianOil’s arrangement with the Russian major rosneft For 6 million tonnes of crude, the discount has reportedly been fixed at around $8 per barrel.