Page 28 - The Indian EYE 060923

BUSINESS EYE JUNE 09, 2023 | The Indian Eye 28

Indian appetite for Russian oil

reaches peak as cheap crude lands

at domestic refineries

The average cost of Russian crude including freight costs landing on Indian shores in April was $68.21 a barrel,
while the cost of Saudi Arabian crude sent to India in April was $86.96 a barrel, while Iraqi oil was priced at $77.77 a barrel

OUR BUREAU
Mumbai/New Delhi
ndia’s imports of cheap Rus-
sian oil set another record in
IMay, with the OPEC+ produc-
er wresting more market share from
Saudi Arabia. India took 1.96 million
barrels a day from Russia last month,
15% more than the previous high in
April, according to data from Vortexa
Ltd. Shipments from Saudi Arabia
slipped to the lowest level since Feb-
ruary 2021, figures from the shipping
analytics company show.
The average cost of Russian
crude including freight costs landing
on Indian shores in April was $68.21
a barrel, according to data from the
ministry of commerce and industry.
That’s the lowest level since the na-
tion started buying major volumes
from Moscow after its invasion of
Ukraine earlier last year.
The average cost of Saudi Ara-
bian crude sent to India in April was India’s import of Russian oil peaked in May due to a combination of factors, which include increased competition
$86.96 a barrel, while Iraqi oil was
priced at $77.77 a barrel. Figures for from Chinese refiners for Russia’s flagship Urals crude (File Photo)
May are expected to be released next
month, but prices are likely to have much as they have room to back off West Asian nations have traditionally dia’s Russian oil imports in recent
dropped further given global bench- spot crude purchases,” said Serena been India’s major suppliers of sour months. However, further increasing
mark Brent fell almost 9% during Huang, head of Asia-Pacific analysis crudes, and a considerable portion it substantially could be fraught with
the month. at Vortexa. of these supplies are under annual challenges and complexities relat-
“Indian refiners continue to show However, India now appears to term contracts, which have mini- ed to payments and Western sanc-
a voracious appetite for Russian be testing the limits of Russian oil mum purchase commitments. Most tions. This is because sweet crudes
crude given their discounts relative imports, experts believe. Huang had of the Russian oil, on the other hand, are generally more expensive than
to Middle Eastern supplies,” ac- earlier said that India’s import of is being bought by Indian refiners on sour crudes, and could breach the
cording to Serena Huang, an ana- Russian oil could peak in May due a spot basis. This essentially means West’s $60 price cap. Urals, on the
lyst at Vortexa. Purchases of Urals to a combination of factors, which that the extent to which Urals can other hand, has mostly traded below
and Sokol oil saw the biggest gain include increased competition from replace other sour crudes is lim- the price cap since December. While
and overall volumes could climb this Chinese refiners for Russia’s flagship ited by Indian refiners’ minimum Indian refiners have been import-
month and July, she added. Urals crude, and Indian refiners’ pur- offtake commitments under term ing sweet crudes from Russia, the
India’s import volumes of Rus- chase commitments for sour grades deals. Meanwhile, Chinese refiners volumes have not been significant
sian crude in May were 14.6 per cent under term contracts with their tra- have also stepped-up purchases of enough to cause any major payment
higher than in April and almost 162 ditional suppliers in West Asia. Urals, leading to more competition or sanctions-related problems so far.
per cent higher from May 2022. “In- Urals accounted for 71.4 per between New Delhi and Beijing. Meanwhile, Oil India has posted
dia’s imports of Russian crude con- cent of India’s Russian oil imports Theoretically, Indian refin- its highest net profit since its incep-
tinue to test new highs… (Indian) in May. India’s import of Urals — a ers can further step-up purchases tion with a jump of 75.20 per cent
Refiners have tested and gained medium-sour grade of crude — ap- of Russian oil by raising import of year-on-year to Rs 6,810.40 crore
confidence in processing Russian pears to have plateaued over recent sweeter grades of crude. In fact, the for the fiscal 2022-23, on the back of
crude, and their voracious appetite months, indicating a limit on India’s share of sweeter or low-Sulphur higher operating income and growth
for Russian crude is likely to grow as capacity to import more of this grade. crudes has seen an increase in In- in oil and gas production.

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