India In Talks To Increase Russian Crude Oil Imports From Rosneft: Report

Indian refiners will increasingly procuring directly from Russian companies such as Rosneft as top international traders such as Glencore Plc wind up their dealings

Indian Oil Corp, Hindustan Petroleum, and Bharat Petroleum, while private processors are Reliance Industries and Nayara Energy, which is partly owned by Rosneft are engaged in the deal. ( Image Source :Getty )

New Delhi: As global players turn down dealings with Moscow over its invasion of Ukraine, India is eyeing to double down on its Russian oil imports with state-owned refiners eager to take more heavily-discounted supplies from Rosneft PJSC, according to Bloomberg.

The domestic processors are collectively working on finalising and securing new six-month supply contracts for Russian crude to India, said people with knowledge of the matter to the news agency.

Cargoes are being sought on a delivered basis from Rosneft, with the seller set to handle shipping and insurance matters, they said. These supply agreements, if concluded, will be separate and on top of shipments that India already buys from Russia via other deals.

According to the report, details on volumes and pricing are still being negotiated with Indian banks set to fully finance all cargoes. Indian refiners will increasingly procuring directly from Russian companies such as Rosneft as top international traders such as Glencore Plc wind up their dealings, they added.

Indian Oil Corp, Hindustan Petroleum, and Bharat Petroleum, while private processors are Reliance Industries and Nayara Energy, which is partly owned by Rosneft are engaged in the deal.

Procurement activities for state and private firms are done independently. Spokesperson at the three largest state-owned companies couldn’t immediately contacted by Bloomberg for comments.

Both state and privately-owned refineries in India have been ramping up purchases of Russian crude as sanctions and trade restrictions rolled out by the US, UK, and European Union have caused most buyers to flee and offer levels to crash. An unprecedented amount of Russian crude was heading to India and China last month as European buyers scrambled for replacements and reached as far as United Arab Emirates for alternatives. The ensuing panic and rerouting of global oil flows have lifted oil by more 20 per cent since late-February when Russia invaded Ukraine.

Refiners in Asia’s second-largest oil consumer have been enjoying elevated profits from turning cheap crude into fuels that’s sold domestically and also in the export market to customers in Europe and the US.

Russian crude forms just part of India’s overall basket of crude oil feedstock, alongside other long-term as well as spot purchases from the Middle East and Africa.

Discounted Russian oil has provided some relief to India, which imports more than 85 per cent of its oil, just as inflation skyrockets alongside surging prices of everything from food to fuel.

According to oil ministry data, the access to cheap crude is already boosting India’s oil imports, which grew almost 16 per cent in April from last year. The share of oil from the Eurasian region, which includes Russia, expanded to 10.6 per cent in April versus 3.3 per cent a year earlier.