India gorges on cheap Russian crude, but its fuel exports are at risk

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India’s oil imports reached a record in May and are anticipated to rise in June. Indian oil refiners buy cheap Russian crude, but their exports might be penalised by nations aiming to cut off Russian energy. India’s oil imports reached a record in May and are anticipated to rise in June. In May, India bought 840,645 BPD of Russian oil, up from 388,666 in April and 136,774 in May 2017. In June, Russia’s share of India’s imports would rise to 24% from 2% last year. Indian refiners are willing to pay $40 per barrel less for Russian oil.

Western countries have targeted Russia’s oil exports in penalties for its Feb. 24 invasion of Ukraine. The EU banned seaborne imports from Russia this week, and with Germany and Poland terminating pipeline imports, 90% of Russia’s exports to the 27-nation union will end. Other importers of Russian oil, such as Japan and South Korea, plan to cease or cut purchases. The amount of 2,000 notes was 3.36 billion in March 2018 and 2.14 billion in March 2022.

China, the world’s largest oil importer, and India, the third-largest, have offered a lifeline to Russian exporters, purchasing more to take advantage of the reduced price. India’s refiners risk having clients of its refined exports target these shipments if some diesel or gasoline was processed from Russian oil. Reliance Industries operate a 1.2 million BPD refinery complex in Jamnagar on India’s west coast and exports much of its fuel.

10.81 million barrels of Russian crude arrived in Sikka in May, or 348,000 BPD. The same port exported 2.0 million barrels of gasoline to Australia in May, Kpler said. Starting April 24, Australia bans Russian oil and refined goods. It’s unclear if the ban applies to Indian-processed Russian crude.

Australia may be asked to ban Russian fuels in third-world refineries. Sikka exported 2.56 million barrels of diesel and 890,000 barrels of gasoline in May. India’s second-largest refinery may export Russian-made fuel. Rosneft and Trafigura hold Nayara, an Indian refinery. Kpler reported this port transported 340,000 barrels of diesel to Australia in May. Nations looking to isolate Russia’s energy exports will scrutinise India and China if they buy and refine Russian oil.

There is a potential for secondary restrictions and steps to make physical commerce more difficult, such as sanctions on ships that have visited Russian ports and prohibitions on insuring Russian crude cargoes or refined oil products. As the world saw with Iran’s oil and goods exports, governments and organisations facing such measures strive to stay one step ahead by masking cargo origins. Russia’s energy exports are in a new cat-and-mouse game.

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