India became the largest buyer of seaborne crude from the former Soviet Union, overtaking China for the fourth consecutive month, buying a record 51.15 million barrels, or 1.65 million barrels per day (mbd), from Russia. Reliance Industries (RIL) and the Rosneft-backed Nayara Energy were private refiners that accounted for over 858,000 barrels per day, or more than half, of all Russian imports, according to energy intelligence firm Vortexa.
While increasing purchases of reduced sulfur grades like Sokol and Novy Port Light, India maintained its imports of medium-sour Russian Urals in February and March, Huang noted. Given its desire to fulfill its term commitments with producers in the Middle East Gulf, India’s imports of medium-sour Russian Urals may have reached a soft ceiling on how much more sour crude it can accept. Nonetheless, domestic refiners have the option to expand their purchases of sweeter grades like Sokol, ESPO mix, and Novy Port Light in order to keep refining at a high level in lieu of the strong local and export demand, said, Serena Huang, Head of APAC Analysis at Vortexa
Trade sources reported that there are occasions when the lighter grades, like Sokol, The G7 pricing cap of $60 per barrel has been exceeded, and Indian refiners are now paying in Russian roubles and, to a lesser extent, UAE dirhams. Payments are also made using Indian banks like the Uco Bank, which have limited contact with the US.
When asked if the alternative payment system to the US dollar would survive, Huang from Vortexa seemed upbeat. Absolutely, she continued, “Especially now that Russia and India are negotiating a long-term supply of Russian petroleum to India, they would be eager to build a different method that lowers the likelihood of meddling from the West,” she added.
