Indian oil refiner balances Gulf and Russian suppliers

Reuters/Danish Siddiqui

• India Oil Corporation is major buyer of Russian crude
• Company chairman says Middle East oil supply remains intact
• G7 price caps succeed in reducing Russian revenues

The Indian Oil Corporation remains committed to term contracts with the Middle East, but increased Russian imports have impacted spot purchases from the region.

“Spot purchases have gone down because somewhere there has to be a dip to accommodate the Russian oil,” said the company’s chairman Shrikant Madhav Vaidya at the 30th annual Middle East Petroleum & Gas conference in Dubai.

India has become one of the biggest buyers of Russian crude oil since the Kremlin’s invasion of Ukraine in February last year.

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At the onset of the conflict with Ukraine, early predictions were that Russian oil exports would rapidly decline. While that has been the case with much of Europe, Moscow’s producers have found willing buyers across Asia.

Thomas Waymel, president of trading and shipping at TotalEnergies, revealed that India imported 1.7 million barrels per day (bpd) of Russian crude, “well above” imports from Saudi Arabia.

“Although I may have taken oil from other geographies, my continued relations with the Middle East in terms of oil supply remain intact,” Vaidya said.

Imports to China from Russia, meanwhile, have almost doubled from 0.7 million bpd in 2019 to 1.3 million bpd in the first quarter of this year.

The G7 nations, along with the EU and Australia agreed to impose a $60-per-barrel price cap on Russian seaborne crude and also set an upper price limit for Russian oil products in a bid to starve Moscow of vital funds.

It also banned the provision of insurance, trade finance, banking, brokering, navigation and other maritime services by companies in the respective nations for the transport of Russian crude to any location. A prohibition on refined petroleum products came into force in February.

According to a report from Reuters, International Energy Agency executive director Fatih Birol said at the weekend that the price cap had reached two main objectives: it did not cause tightness in the markets as Russian oil continued to flow, but it succeeded in reducing Russian revenues.