Indian oil processors are open to buying even more Russian crude if the price is right, refinery executives have said, which could provide a bigger outlet for Moscow nearly a year after its invasion of Ukraine.
The South Asian nation increased oil imports from Russia in 2022, ending the year with record monthly volumes as discounted barrels lured buying. Executives said more cheap crude could be available for India from early next month, with a European Union ban on sea shipments of Russian fuel likely to hit refining rates at the key OPEC+ producer.
India and China have become a crucial destination for Russian oil after many others refused shipments because of the war in Ukraine. Indian refiners can convert cheap Russian crude into fuels like diesel and then sell it to regions like Europe, boosting processors’ profit margins. Impending EU sanctions are expected to increase demand for fuels from Asia.
“It’s kind of a circular trade, as India takes Russian crude that Western buyers don’t want and refines it into products to resell to the West,” said Mukesh Sahdev, head of downstream oil trading at Rystad Energy.
India’s crude imports hit a record last year, though increased Russian barrel purchases have reduced OPEC flows. Cartel members accounted for about 62% of total oil imports from April to December, compared with about 71% in the previous corresponding period, according to government data.
Refinery executives said Indian processors will hold onto their long-term supplies from producers such as Saudi Arabia, and any increase in Russian purchases will be made in a timely and opportunistic manner.
Russian fuel oil flows to India have also increased, nearly doubling month-on-month in December to more than 137,000 barrels a day, according to Kpler data. The product can be used to upgrade other, more valuable fuels or to generate power.
This story is published from a news agency source with no text changes.