Oil prices will likely remain elevated at over $100 per barrel for the rest of this year as the Russian invasion of Ukraine roils markets and changes trade flows, according to India's top refiner, Indian Oil Corporation (IOC).
The fallout from the war in Ukraine will also slow down global economic growth significantly this year, IOC's director of finance, Sandeep Kumar Gupta, said at an event on Friday, as carried by Reuters.
IOC is one of many Indian refiners that have boosted purchases and imports of Russian crude oil over the past few months, attracted by the steep discounts of the Russian grades compared to oil from other countries. As of Thursday, the discount at which the flagship Russian crude, Urals, is selling was at a massive $35 a barrel below the international benchmark, Brent, which traded at $111 a barrel early on Friday.
Just a few months ago, India was a small and insignificant buyer of Russian oil. Following the Russian invasion of Ukraine, the steep discounts, at which Russia sells its oil to Asia after the Western bans and sanctions on Moscow, have attracted many Indian buyers.
Since April, India's imports of crude oil from Russia have jumped by more than 50 times, to the point of representing 10 percent of all Indian imports, a senior government official told Business Standard this week.
So far this year, India is estimated to have now imported five times the amount of all the Russian crude it bought in the whole of 2021.
Russia is even estimated to have overtaken Saudi Arabia to become India's second-largest supplier of crude oil in May. The average daily rate of Russian oil exports to India stood at 819,000 barrels last month, compared with 277,000 barrels per day (bpd) in April.
Attracted by cheap prices, India, as well as China, continue to increase their imports of Russian crude, which is now mostly banned in the West.
By Tsvetana Paraskova for Oilprice.com
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Tsvetana is a writer for Oilprice.com with over a decade of experience writing for news outlets such as iNVEZZ and SeeNews. More