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High prices and maintenance prompted Indian refiners to reduce purchases of Russian crude oil in September compared to August, which resulted in lower prices of Russia’s crude landing in the world’s third-largest oil importer in September, per Reuters estimates based on official Indian data.
In September, the average landed price of Russian crude for India was around $81.70 per barrel, down from about $86 a barrel in August, according to the data from the Indian Trade Ministry crunched by Reuters.
The lower demand from Indian refiners led to wider discounts on Russia’s crude oil compared to grades from other sources.
India’s crude oil imports from Russia declined by 9% month-on-month in September and averaged around 1.42 million barrels per day (bpd), according to the official Indian data.
The Indian Trade Ministry’s data on landed prices did not specify how much refiners pay for insurance, shipping, and other fees. India typically buys Russian oil on a delivered basis, an arrangement in which the seller arranges the shipping and insurance.
The average landed price in India of crude oil from Russia was well above the $60 per barrel price cap set by the G7 if Western providers are to be used for insurance, shipping, and financing.
Tightening global crude supply and rising international prices raised the price at which Russia’s crude is being sold to India at about $20 per barrel over the G7 price cap of $60, traders told Reuters in September.
The Russian flagship crude grade, Urals, was being sold to one of Moscow’s top customers, India, at nearly $80 per barrel, or around 30% above the price cap set by the G7 and the EU.
India’s crude oil imports from Russia are estimated to have dropped in October by around 4% compared to September amid dwindling discounts for Russia’s crude. At the same time, Indian refiners bought more oil from Saudi Arabia.
By Charles Kennedy for Oilprice.com
Charles is a writer for Oilprice.com