India doubles down on every major Russian oil variety as flows persist

India is doubling down on Russian crude oil purchases despite warnings from the US, snapping up every major grade from the OPEC+ producer as its war in Ukraine nears a third month.

State-run oil refiners are now looking at privately negotiated deals instead of buying through public tenders in order to get better prices, according to Indian refinery officials and traders. The South Asian nation has purchased everything from flagship Urals that ships from ports in the west, to a rare cargo of ESPO from the Far East, typically favored by China.

India has a longstanding relationship with Russia that includes weapons buying, and purchasing of oil adds to the Kremlin’s coffers while it tackles financial sanctions. President Joe Biden last week told Prime Minister Narendra Modi that the U.S. was ready to help India diversify its energy imports, but self-sanctioning of Russian crude by some is making it cheap and alluring.

The meeting between to the two leaders followed more pointed commentary from Biden’s top economic adviser earlier this month, who said that the U.S. had warned India against aligning itself with Russia. The war has fanned inflation and driven benchmark oil futures above $100 a barrel.

India has bought millions of barrels of Urals crude in the spot market since the end of February, according to data compiled by Bloomberg, along with an ESPO cargo currently making its way to Sikka in the country’s west. It’s rare for the nation’s refiners to take the Far East grade because it’s transported in smaller ships and voyages are relatively long, making it less economical.

Another major crude from Russia’s Far East — Sokol — has also been bought by state-run processors. Indian oil refiners haven’t purchased any Russian grades through public tenders so far this month and privately negotiated deals are likely to be appealing after buyers missed out on the steep discounts for similar cargoes being offered in Europe.

Russian oil may get even cheaper for willing buyers. The European Union is facing mounting calls to curb its imports, while Chinese crude demand is under pressure from a Covid-19 resurgence that’s led to a series of lockdowns across the country. The U.S. and U.K. have already pledged to ban Russian imports.

Dear Reader,

Business Standard has always strived hard to provide up-to-date information and commentary on developments that are of interest to you and have wider political and economic implications for the country and the world. Your encouragement and constant feedback on how to improve our offering have only made our resolve and commitment to these ideals stronger. Even during these difficult times arising out of Covid-19, we continue to remain committed to keeping you informed and updated with credible news, authoritative views and incisive commentary on topical issues of relevance.

We, however, have a request.

As we battle the economic impact of the pandemic, we need your support even more, so that we can continue to offer you more quality content. Our subscription model has seen an encouraging response from many of you, who have subscribed to our online content. More subscription to our online content can only help us achieve the goals of offering you even better and more relevant content. We believe in free, fair and credible journalism. Your support through more subscriptions can help us practise the journalism to which we are committed.

Support quality journalism and subscribe to Business Standard.

Digital Editor