Indian Refineries Seek Alternatives to Russian Oil Due to US Sanctions
State refineries in India are exploring new oil suppliers, avoiding purchases from Russia due to US-imposed sanctions. This could alter supply balance in the region and impact the oil products market in Western Europe and Asia.
Hindustan Petroleum Corp (HPCL) and Mangalore Refinery and Petrochemicals Ltd (MRPL), two of the largest refineries in India, have refrained from buying Russian oil. According to Reuters, the companies have already purchased a total of 5 million barrels of oil from alternative sources. HPCL secured 2 million barrels of American oil West Texas Intermediate and Murban from Abu Dhabi for delivery in January. MRPL signed a deal for 1 million barrels of Basra Medium set for delivery in the first half of January.
This move is triggered by sanctions the US has imposed on Russian energy giants “Rosneft” and “Lukoil.” The sanctions complicate Russian oil purchases, prompting Indian refineries to seek other sources. According to media reports, these market changes have resulted in the disruption of two-thirds of Russian supplies to India. The five largest Indian refineries have already declined contracts with Russia.
These actions could significantly affect Russia’s energy export revenues. This is also supported by a decline in global oil prices and a weakening ruble. Analysts note that the situation may lead to long-term changes in the regional oil products market and encourage other countries to seek more reliable supplies.
| Country | Purchased Oil | Volume (million barrels) | Delivery Date |
|---|---|---|---|
| USA | West Texas Intermediate | 2 | January |
| UAE | Murban | 2 | January |
| Iraq | Basra Medium | 1 | January 1-7 |
