discounts on Russian oil decreased by 87% – Kommersant

Discounts on Russian oil for Indian refineries fell to $4 per barrel from peaks of $25-30, reports The Times of India with reference to sources. According to them, sellers are waiving shipping tariffs in order to cover the gap with Brent benchmark oil and bypass the price ceiling imposed by Western countries.

According to the publication, now Russian oil accounts for about 40% of India’s total imports, while before the start of the military conflict in Ukraine, its share was less than 2%. The owners of Indian refineries buy Russian oil on a delivery basis, and the seller arranges delivery and insurance. The Times of India notes that this aspect has become even more important since the imposition of a cap on Russian oil prices “which has made delivery or insurance difficult to obtain.”

“This, and fragmented purchases of refineries, especially state-owned enterprises, which are the largest buyers, are what sellers of Russian oil take advantage of. They charge $11-19 per barrel of freight from the ports of the Baltic or Black Seas, which is almost twice the norm, and sell oil at a price of $1-2 below the limit, ”an unnamed source who participated in the auction told the publication.

He is convinced that Indian buyers “may soon lose the discount” if oil prices continue to decline and close the gap with the price ceiling. “Three obscure agencies dominate the shipping and insurance offers submitted by Russia for deliveries to India. They are not affiliated with global companies. As a result, they can easily play tenders and bring the cost of Russian oil closer to the price of the standard – now it is $ 75-76, ”the source of The Times of India explained.

He sees the only way to protect India’s interests is through “collective bargaining”, especially with state-owned refineries. “China is flooded with Russian oil and cannot consume more because its economy is not growing. India remains the only major buyer where consumption is growing rapidly, at 5-6% per annum. This should be used for futures deals,” the source said.

Against the backdrop of anti-Russian sanctions, India, along with China, also became the main buyers of Russian coal, oil and gas. In Indian Oil spokethat India will increase the share of Russian oil imports to 30% by 2024. According to Kpler, in May Russia provided almost half of the oil supplied to India. In June, the volume of Russian oil imports to India also has reached record scores.

Laura Keffer