India buys Russian oil accounting for discounts despite sanctions
Indian state-owned oil refining companies took advantage of discounts on Russian oil for January supplies by citing available volumes from suppliers unaffected by sanctions.
Two leading state-owned oil refining companies in India, Indian Oil and Bharat Petroleum, according to Bloomberg, recently purchased Russian oil. Despite difficulties arising from the sanction environment, Indian refineries decided to take advantage of favorable market conditions, particularly discounts of about $5 per barrel, which have increased compared to the previous month. However, it is partly important to note that the total number of purchased shipments has remained at a limited level.
At the same time, India continues diplomatic negotiations with the United States, discussing oil supply issues. It is expected that the total import volume will not exceed one-third of the usual level this year — up to 600,000 barrels per day. On average, the oil price ranges from $40 to $45 per barrel when calculated in UAE dirhams and US dollars.
It should be noted that some Indian refineries, such as Mangalore Refinery and Petrochemicals Ltd. and HPCL-Mittal Energy Ltd., continue to avoid Russian oil. Major private companies, including Reliance Industries, have also announced the cessation of processing Russian oil at their facilities.
Data indicates that previously, the volumes of Russian oil supplies reached a record low over the past year as major buyers in China, India, and Turkey reduced their purchases. This forced Russia to offer significant discounts to remain competitive in the market.
| Country | Purchase Volume (barrels per day) | Discount per barrel (US dollars) | Payment Method |
|---|---|---|---|
| India | up to 600,000 | 5 | US dollars, UAE dirhams |
| Other countries | Decreased | Large | Depending on agreements |
