Exports of Russian crude to India have risen since the start of the month as sanctions have forced traders in Europe to avoid Russian cargo, the Financial Times reported, citing data from Kpler.
The report notes that the average daily volume of purchases of Russin oil in India amounted to 360,000 bpd, which is four times the volume of daily purchases last year.
“Already shipped shipments of oil from Russia that cannot find buyers in Europe are being bought by India,” Alex Booth, head of research at Kpler, told the FT. “Exports to India rose in March even before New Delhi’s official announcement.”
Russia has not traditionally been a major supplier of oil to India, but the sanctions have changed the situation. Because of them, Russian oil is trading at a deep discount of $25-$30 a barrel, making it cost-effective for India despite normally high transportation costs, industry sources told the FT.
India imports more than 80 percent of its crude oil consumption and seeks to diversify its sources, including by increasing consumption of Russian oil. Western sanctions have halted Russia’s trade in US dollars, but New Delhi and Moscow are reportedly discussing a payment mechanism in their own currencies.
The United States expressed its dissatisfaction with India’s neutral stance on the war in Ukraine and its apparent willingness to continue doing business with Russia. The latest sign of that dissatisfaction came from White House Press Secretary Jen Psaki, who this week commented on India’s plans to continue importing Russian oil.
“I don’t think it would be a violation [sanctions]but also think about where you want to stand,” Psaki said. “When the history books are being written at this point in time, supporting Russia — the Russian leadership — is supporting an invasion that obviously has devastating consequences.”
Irina Slav for Oilprice.com
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