Indian Companies Acquire Russian Crude Amid Temporary U.S. Waiver
Indian firms have swiftly secured the entirety of Russian crude available on the spot market, completing deals in under a week following a temporary waiver granted by the United States that allows New Delhi to purchase the oil. According to Bloomberg, sources familiar with the transactions indicate that these acquisitions total approximately 30 million barrels, a volume that aligns with India’s average monthly imports of Russian crude around 1.1 million barrels per day as of February.
A significant portion of this crude has already been loaded onto tankers, which have been idling in Asian waters as floating storage, a situation exacerbated by previous U.S. sanctions and a prior decrease in India’s purchases.
This surge in purchases comes amid significant disruptions in oil supply from the Middle East, triggered by U.S.-Israeli military actions in Iran. As a result, shipments from Saudi Arabia and Iraq have been halted for over a week, with Iran actively targeting vessels in the Strait of Hormuz.
Seizing the opportunity to replenish their reserves, Indian companies acted rapidly, paying premiums ranging from $2 to $8 per barrel above the Brent benchmark price. Brent crude had been trading above $85 per barrel since last Friday, briefly peaking near $120 on Monday morning before experiencing a decline. By Tuesday afternoon (GMT), Brent was quoted at approximately $88.20.
Prior to the escalation of tensions in the Middle East, Russian crude sold in Asia had been trading at discounts exceeding $10 per barrel compared to Brent, factoring in freight costs to the buyer’s port. Brent prices had largely been fluctuating in the $60-$70 range since the previous summer.
Among the key players in these transactions, state-owned Indian Oil Corporation and private conglomerate Reliance Industries each acquired roughly 10 million barrels in recent days.
The U.S. waiver applies specifically to Russian crude oil and petroleum products loaded onto vessels before March 5, as long as they are delivered to India and purchased by Indian entities. European Economy Commissioner Valdis Dombrovskis noted in a recent call with G7 finance ministers that the U.S. considers the waiver to be “very much contained both in terms of time and scope,” expressing little expectation of a significant impact on Russian oil revenues.
For further reading, this article is also available in Russian via The Moscow Times’ Russian service.
Source: Original Source
