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India Wants To Buy Russian Oil, At Below $70 A Barrel

The world’s third-largest oil importer, India, is 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, Bloomberg reported on Wednesday, quoting sources familiar with the talks. 

Since the beginning of the Russian war in Ukraine, India – a price-sensitive crude buyer which 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 India – alongside China – is left as one of the few buyers willing to deal with Russian oil, and is using that leverage in high-level talks with Russia. India wants Russia to discount its oil to below $70 a barrel on a delivered basis, according to Bloomberg’s sources. 

If India and Russia agree on such a hefty discount – with Brent over $108 a barrel early on Wednesday – state-owned refiners in India could import as much as 15 million barrels of Russian oil in May, Bloomberg’s sources say. This would be equivalent to around 10% of all of India’s oil imports.

While China and India are not shying away from Russian crude, the logistics of shipping oil from Russia’s Black Sea and Baltic ports to Asia and the scarce tanker availability, bank guarantees, and insurance for Russian cargoes would limit the amount of oil that Asia could take and compensate for lost barrels that are no longer going to Europe, analysts say.

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.

India has abstained from joining almost all countries in the world in condemning Russia’s invasion of Ukraine in UN resolutions, and has defense and military ties with Moscow.    

By Tsvetana Paraskova for Oilprice.com

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