Indian Refiners Increase Russian Oil Imports Amid Easing Sanctions Threat
Domestic refiners splurge on Russian oil as sanctions threat begins to fade
Business Standard
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Indian refiners have ramped up imports of Russian crude oil, averaging 1.98 million barrels per day in March 2023, as the threat of U.S. sanctions diminishes. With ongoing supply challenges from West Asia, refiners expect to maintain high purchasing levels for the remainder of the year.
- 01Indian refiners have increased Russian oil imports significantly, becoming the largest seaborne buyer post-Ukraine invasion.
- 02Imports averaged 1.98 million barrels per day in March 2023, despite a drop in April due to refinery maintenance.
- 03A U.S. waiver allowing Russian oil purchases is expected to be extended, facilitating continued imports.
- 04India's reliance on Russian crude has grown amid supply shortages from the Persian Gulf.
- 05Russian oil is being offered at a 40% discount to spot prices, making it an attractive option for Indian refiners.
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In recent months, Indian refiners have significantly increased their imports of Russian crude oil, averaging 1.98 million barrels per day in March 2023, the highest since June 2023. This surge comes as the threat of U.S. sanctions begins to fade, allowing India to capitalize on discounted Russian oil prices. Despite a slight decrease in April to 1.57 million barrels per day due to maintenance at Nayara Energy's refinery, experts predict that imports will rebound. Vandana Hari, founder of Vanda Insights, noted that India is maximizing its intake of Russian crude, especially as supplies from the Persian Gulf remain limited. The geopolitical landscape has shifted since the U.S. began applying pressure on India to halt Russian oil purchases, but recent waivers have allowed India to buy significant volumes, totaling about 60 million barrels for delivery this month. The ongoing conflict in the Persian Gulf has compounded India's challenges, leading to shortages and rising prices for crude and liquefied natural gas. Russian shipments are currently being offered at a 40% discount to spot prices, further incentivizing Indian refiners to secure these imports.
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The increase in Russian oil imports at discounted rates could help stabilize India's energy supply and potentially lower fuel prices for consumers.
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