India’s state-run refiners Indian Oil Corp. and Bharat Petroleum Corp. have bought Russian crude for January delivery, lured by discounts and plentiful supplies from non-sanctioned sellers, according to people familiar with the matter.
The unspecified number of cargoes has been secured at a discount of about $5 per barrel to Dated Brent from new trading entities, the people said, asking not to be named as the discussions are not public. That compares to a narrower discount of $3 per barrel a month ago.
The people said India’s total buying is unlikely to exceed a third of its pace for much of this year, meaning it would not be more than 600,000 barrels a day. Purchases by sanctioned refiner Nayara Energy Ltd., part-owned by Rosneft PJSC, would typically account for more than half of that.
Considering discounts and freight cost, those prices mean Russia should earn about $40-$45 a barrel on average, the people said, with payments made in UAE dirhams and US dollars.
IOC, India’s largest refiner, has been buying non-sanctioned Russian crude for several weeks, and took some December delivery shipments. BPCL did not take Russian cargoes during that time. IOC and BPCL did not immediately respond to requests for comment.
The purchases confirm a cautious return to Russian oil among some Indian refiners, though overall spot purchases remain limited as refiners assess a changing sanctions landscape. Trade talks between Washington and New Delhi are also ongoing, with crude shipments still a particular pain point. The Trump administration has repeatedly berated India for its Russian trade.
Four of Russia’s biggest oil producers, namely Rosneft, Lukoil PJSC, Surgutneftegaz and Gazprom Neft, have been blacklisted by the US, a move that has prompted banks working with Indian refiners to increase scrutiny on any trade. The tighter sanctions will also likely knock Russia from its recent position as India’s No. 1 crude supplier, paving the way for other sellers like Saudi Arabia to once again play a bigger role.
Some Indian refiners such as Mangalore Refinery and Petrochemicals Ltd. and HPCL-Mittal Energy Ltd. continue to stay entirely clear of Russian crude, the people said. Private refiner Reliance Industries said in late-November it would stop processing Russian oil at part of its giant Jamnagar oil refinery.
(Reporting by Rakesh Sharma. With assistance from Serene Cheong.)
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