India Purchasing More Oil From The US As Stricter Sanctions Impact Russian Supply: Report

Indian oil refiners are purchasing more oil from the US as the sanctions obstruct trade with Russia, media reports stated. The country’s oil refiners are on the path to buying the most American crude in nearly a year as rigid sanctions from the US forced the firms to find other sources of supply apart from Russia. 

Public firms including Bharat Petroleum Corporation and Indian Oil Corporation, with private refiner Reliance Industries Ltd, collectively purchased nearly 7 million barrels of April-loading crude from the United States in the current month till now, reported Bloomberg citing traders who wished to remain anonymous. 

Kpler noted that this would mark the largest monthly volume seen since May. Notably, India’s buying of crude from Russia increased after the latter invaded Ukraine and the nation remained the biggest supplier for India. 

However, stricter sanctions from the US have led to cargoes being stranded and discounts being narrowed. Recently, India has also increased its purchases from Saudi Arabia. 

The report noted that it didn’t receive any response to email seeking comments from Bharat Petroleum, Indian Oil, and Reliance Industries. 

It added that the majority of the US crude purchased in the month was West Texas Intermediate Midland, and according to the traders, the cost of the delivery remained more expensive than buying barrels from the Middle East. 

WTI Midland is known to produce more gasoline and diesel, whose consumption is expected to increase in the coming months in light of the forthcoming elections, increase in power generation, and crop harvesting, the report stated citing officials from the Indian refinery who wished to remain anonymous. The sanctions have impacted Russia’s Sokol oil the most, which is considered to be comparable to WTI Midland. 

The official data from Kpler, compiled by Bloomberg, revealed that India’s imports of Russian crude stood at around 40 million barrels last month and made up nearly 30 per cent of the nation’s total oil and condensate purchases. 

Also Read : India’s Exports To Reach $450 Billion By FY24 End Despite Challenges, Says FIEO President

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