New Delhi, 09th July 2923: Sources confirm that the enormous discounts on Russian crude oil that India has gorged on since the Ukraine war has fallen, but shipping charges levied by Russia-arranged organisations remain ‘opaque’ and higher than normal.
Russia invoices Indian refiners at a price somewhat lower than the USD 60 per barrel price cap imposed by the West. Still, it charges between USD 11 and USD 19 per barrel for delivery from the Baltic and Black Sea to the West Coast, sources confirm.
The USD 11-19 per barrel transport expenses from Russian ports to India are higher than prices for comparable distances, such as a cruise from the Persian Gulf to Rotterdam.
Following Moscow’s invasion of Ukraine in February last year, European purchasers and some Asian buyers, such as Japan, sanctioned and avoided Russian oil.
As a result, Russian Urals crude is currently trading at a discount to Brent crude (the worldwide benchmark). According to sources, the discount on Russian Urals grade has reduced from over USD 30 per barrel in the middle of last year to closer to USD 4 per barrel.
Because of the massive electrification of vehicles and demand concerns in an unstable economy, Indian refiners, which transform crude oil from below ground into finished goods such as petrol and diesel, are currently the largest importers of Russian oil.
To take advantage of the reduced oil, Indian refiners increased their purchases from less than 2% of their total imports before the Ukraine war to 44%.
