India May Import About 15 Million Barrels Of Crude Oil From Russia

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Indian financial media "Business Standard" quoted sources as saying on March 17 that India may buy as much as 2 million tons (about 15 million barrels) of crude oil from Russia this year, and the transaction may be carried out in Russian rubles or Indian rupees. In addition, it is reported that India has recently reached an agreement with Russia to import 3 million barrels of crude oil, which will be delivered in May.

The "Business Standard" report pointed out that in the case of Russia being sanctioned and selling crude oil at a low price, the transaction between the two parties will adopt the CIF model, which means that Russia, as the seller, will take the initiative to bear the transaction insurance and transportation costs. The report also mentioned that the Indian Oil Corporation (IOC) has purchased 3 million barrels of Russian Urals oil from oil trader Vitol for delivery in May this year.

The report of the US "Wall Street Journal" on the 16th corroborated the news. According to the report, two Indian government officials revealed that in recent days, India has reached an agreement with Russia to import 3 million barrels of crude oil, which will be delivered in May. Get more crude oil supplies. The Indian government plans to buy oil from Russia at preferential prices to cushion the impact of rising oil prices.

One of the Indian officials said that offers for Russian crude were around 20 percent lower than global benchmarks and that insurance and shipping were covered by Russia. Indian officials also said the deal for the 3 million barrels of crude was part of an agreement between Indian Oil Corp and Rosneft Oil. The two sides initially struck a deal in 2020 that offered India the option of importing about 14 million barrels of crude from Russia by the end of 2022. The agreement was further extended during Putin's visit to India in early December. But it wasn't until this year that the Russian-Ukrainian conflict broke out and sanctioned Russia drove down crude export prices that Indian Oil finally made the decision.

"We are fulfilling this contract that is beneficial to India," the Indian official said, adding that India may buy more crude from Russia given the many crude deals between India and Russia. Imports of 3 million barrels are lower than India's current consumption needs of about 4.5 million barrels per day.

India is the world's third-largest crude oil importer after China and the United States and relies on imports for 85% of its crude oil needs, but Russian oil accounts for only about 2% of India's imports, part of India's strategy to diversify its energy imports.

Although the United States, Europe and other countries have tried to contain Russian energy exports, India has recently released several announcements that it will continue to purchase Russian oil.

Reuters quoted two Indian officials as saying on the 14th that India may accept Russia's offer to buy crude oil and other commodities at a discount. Indian Oil and Gas Minister Hardeep Singh Puri said on the same day that he had approached Russian officials about potential crude purchases and that India was ready to explore all possible options.

"I will be very happy once our oil companies reach an agreement with their Russian counterparts," Puri said.

India's actions have also attracted the attention of the United States.

Asked at a press conference on the 15th about reports that India may buy discounted Russian oil, White House press secretary Psaki said: "Our message to any country is consistent, it is clear that it is to comply with Sanctions against Russia." She said that while she did not think India's actions violated sanctions, "consider when this moment is recorded in the history books, which side do you want to be on? To support the Russian leader is to support.' Invasion,' and 'invasion' would have devastating effects."

Ami Bera, a Democrat of Indian origin, "caught" India, "As the world's largest democracy and the leader of the Quadrilateral Security Dialogue (QUAD), India has a responsibility to ensure that its actions do not directly Or indirectly support Putin and his 'aggression'."

The Russian Satellite News Agency quoted India's "Livemint" report on the 14th as saying that two Indian government officials revealed that India and Russia are studying the possibility of using the renminbi as a base currency as a transition to using their currency for transactions.

Harsh V. Pant, head of strategic research at the Observatory Research Foundation, an Indian think tank, believes that India is under pressure to address rising energy costs and curb inflation, which means that discounted crude from Russia is something India cannot. Missed deal. Another possible factor for India, he said, is that a significant weakening of the Russian economy could jeopardize Russia's ability to supply India with defense products.

After the outbreak of the Russia-Ukraine conflict, with the changes in the geopolitical situation, the international oil price fluctuated wildly. Earlier last week, U.S. West Texas Intermediate (WTI) and London Brent (Brent) futures hit new highs of $130.50 a barrel and $139.26 a barrel, respectively.

But in recent days, international oil prices have been falling all the way. As of the close on the 16th, light sweet crude oil futures for April delivery on the New York Mercantile Exchange fell $1.4 to close at $95.04 a barrel, a decrease of 1.45%; London Brent crude futures for May delivery fell $1.89, to close at $98.02 a barrel, down 1.89%.

Jeffrey Halley, the senior market analyst at U.S. futures trader Oanda, said that concerns about the stagflation caused by the conflict between Russia and Ukraine, the Federal Open Market Committee (FOMC) rate hike and the progress of the Russia-Ukrainian negotiations Expectations have become factors that inhibit the continued rise in oil prices.

"There's an old saying that the best solution to high oil prices is high oil prices themselves, and it still holds," Halley said.