Discounts dip but Russian crude keeps flowing

Time of India

20 hours ago

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NEW DELHI: The flow of Russian crude to India remains unabated in spite of discounts shrinking to $1.5-2 per barrel as market factors and input requirement continue to drive refiners' choice in the absence of any govt directive for or against those imports amid US and European Union (EU) pressure.
'We are buying crude as per the economics. We are not making any extra effort for either increasing or decreasing Russian crude (purchase)," IndianOil chairman Arvinder Singh Sahney said on Thursday.
Coming from the head of India's largest state-run refiner and a major buyer of Russian crude, the statement can be construed as an indication the govt remains undaunted by western pressure against purchase of those barrels.
Govt sources said a team of officials from the external and commerce ministries is set to visit Russia for further discussion on a Rupee-Rouble trade, something both countries have been pursuing for years.
Several cargoes of Russian crude was delivered to western ports last week, contrary to foreign media reports of India pausing purchase of Russian oil. Describing those reports as 'wrong', Sahney pointed out that Russian oil was not sanctioned like Iranian or Venezuelan crude but is only subject to a price cap.
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He said the US had set the price cap at $60/barrel, among other curbs, after Russia's invasion of Ukraine in 2022. The EU's latest curbs has lowered the cap to $47 (at current oil prices). There is no curb on buying Russian oil within these conditions.
Sahney said buying (clean) Russian oil even at small discounts could make sense for refiners if the yield patten of that particular grade suits the production plan at a given point.
'If the pricing and characteristics of the crude suits our scheme of processing, we buy,' he said explaining the monthly variations in the quantity of imports from Russia or the US.
Separately, executives of other refining companies said the wind-down provisions in the US penalty on New Delhi allow import of Russian crude loaded upto seven days from the order, after which the 25% additional tariff will be imposed on Indian goods exports.
'We will continue to import Russian oil but will not violate the sanctions,' an executive of major refining company said requesting that neither he nor his company be identified.