Private Indian conglomerate Reliance Industries has purchased at least 15 million barrels of Russian crude at a discount since the start of Russia’s invasion of Ukraine, Reuters reported on Friday, citing trade sources and tanker data, as Indian refiners are enjoying record discounts for Russian crude shunned in the west.
Reliance Industries – which has India’s largest refinery and the world’s largest refining center, Jamnagar – bought an average of 5 million barrels of Russian crude for delivery each month between April and June, Reuters sources said.
Reliance Industries is buying the Urals – whose main destination before the war was Europe – and is expected to receive its first shipment of ESPO crude, which is usually delivered to China, according to data from oil tanker Refinitiv cited by Reuters.
Since the start of Russia’s war in Ukraine, India – a price-sensitive crude buyer that has criticized OPEC and OPEC+ for keeping oil prices “artificially high” – has increased its purchases of Russian crude . Before the war, Indian refiners rarely bought oil from Russia on such a scale due to high transportation costs. Today, cheaper Russian barrels – with the flagship Urals grade offered at a massive $30 a barrel discount to dated Brent – look irresistible to Indian refiners, despite warnings from the United States that buying Putin’s oil is not in India’s best interest.
India has refrained from joining almost every country in the world in condemning Russia’s invasion of Ukraine in UN resolutions and has military and defense ties with Moscow.
India, along with China, is snapping up unwanted cheap Russian cargo in the West, but analysts say the two Asian importers won’t be able to absorb all the crude that Europe and big oil companies international companies and trading houses avoid.
Putin is confident that Russia can find willing new buyers for its oil in Asia. China and India are taking some of the oil the West no longer wants. Yet logistics, high freight rates, insurance, bank guarantees and payment obstacles prevent willing Asian buyers from buying all the oil that Russia traditionally sells on the European market.
By Tsvetana Paraskova for Oilprice.com
More reading on Oilprice.com:
