Rosneft, the largest oil producer in Russia, will ship seven crude cargoes to India’s top refiner, Indian Oil Corporation, this month, traders with knowledge of the deals told Reuters on Friday. Since the beginning of the Russian war in Ukraine, India – a price-sensitive crude buyer that has criticized OPEC and OPEC+ for keeping oil prices “artificially high” – has increased its purchases of Russian crude. Before the war, Indian refiners rarely bought oil from Russia at such a scale because of high freight costs.
Now, according to Reuters’ sources, Rosneft will load seven 100,000-ton cargoes of the Urals blend from Russia’s Baltic Sea ports in the second half of May.
Urals, Russia’s flagship crude blend, was typically sold in Europe before the war in Ukraine, due to the proximity to the Russian ports on the Baltic Sea and the Black Sea. After the invasion of Ukraine, however, Western refiners and traders have started to shun Russian crude and are expected to continue to do so for years as the EU is considering the details of implementing a full embargo on all Russian oil imports.
Major international traders have already said they would either cut or phase out purchases of Russia’s crude in the coming weeks.
India, the world’s third-largest oil importer, is reportedly negotiating steep discounts for the Russian oil it is prepared to buy, asking for below $70 per barrel price to compensate for logistics, financing, and sanctions troubles for buying crude that is now toxic for most of the West.
Cheap Russian barrels currently appear irresistible to Indian refiners, despite warnings from the United States that buying Putin’s oil is not in New Delhi’s best interest.
Increased purchases of Russian crude in India could make tracking Europe’s embargo on Russia’s oil more complicated.
Earlier this week, Shell’s chief executive Ben van Beurden said there was no way to trace whether there is Russian crude oil or how much crude from Russia will go into the refined products market globally.
“So therefore, diesel coming out of an Indian refinery that was fed with Russian crude is considered to be Indian diesel,” Shell’s top executive added, highlighting the challenge the West faces in truly banning Russian oil from the market.
By Tsvetana Paraskova for Oilprice.com
More Top Reads From Oilprice.com:
- The U.S. Shale Patch Is Facing A Plethora Of Problems
- Europe May Lose The Energy Transition Race Before It Really Begins
- Upstream Oil Industry To See Highest Profits Ever In 2022