According to refinery executives, India’s oil processors are willing to purchase additional Russian crude if the price is right, potentially giving Moscow a larger market almost a year after its invasion of Ukraine. The South Asian country expanded its imports of Russian oil in 2022, finishing the year with record-high volumes every month as cheap barrels encouraged purchasing. A European Union embargo on seaborne Russian gasoline supplies may have an impact on refining costs in the major OPEC+ producer, executives said, adding that more inexpensive crude may be accessible to India starting at the beginning of next month.
Following the rejection of shipments by many other countries due to the conflict in Ukraine, India and China have emerged as important markets for Russian oil. The ability of Indian refiners to transform inexpensive Russian crude into fuels like diesel and then sell to markets like Europe helps processors’ profit margins. The demand for fuels from Asia is anticipated to increase as a result of the looming EU sanctions.
Mukesh Sahdev, the head of downstream oil trading at Rystad Energy, described the situation as “a bit of a circular trade going on as India gets Russian crude that Western purchasers don’t want and refines it into goods for resale to the West.” India’s oil imports reached a record high last year, despite the fact that higher purchases of Russian barrels have reduced OPEC supply.
According to government figures, cartel members made up roughly 62% of all oil imports from April to December, down from nearly 71% during the prior equivalent period. The executives of the refineries stated that any increase in Russian imports will be made on an ad hoc and opportunistic basis, with Indian processors continuing to receive their long-term supplies from producers like as Saudi Arabia.