New Delhi: India, the world’s third-biggest oil importer, is studying ways to buy Russian crude available at a steep discount as more and more customers shun the nation’s supplies following the war in Ukraine.
India is considering workarounds that would allow it to purchase cheaper oil from Russia through a mechanism that circumvents international sanctions, according to government officials familiar with the matter. India is consulting its central bank, exporters and Russian authorities for rupee payments benchmarked to U.S. dollars for buying the oil, the officials said, asking not to be identified citing rules.
A finance ministry spokesman couldn’t immediately be reached for comment.
Restricted financing for purchases of Russian commodities is pushing the energy producer to offer buyers some financing flexibility on its cargoes, including use of open credit. Cheaper Russian crude can help India, which is facing a major inflationary shock from oil’s rally to over $130 a barrel.
India wants to use a smaller state-run bank such as UCO Bank or one with minimum exposure to the curbs imposed by the U.S. and European nations to handle the payments process, the officials said. It has used similar methods while trading with Iran previously.
Last week, Russian Deputy Prime Minister Alexander Novak discussed energy cooperation in a phone call with India’s Oil Minister Hardeep Puri. Russia sees prospects for raising crude oil exports to India, a statement from the Russian government cited Novak as saying.
India is keeping all options open to see how much oil it can import from Russia or from new suppliers that could be returning to the market, Puri told Indian lawmakers on Monday. There are discussions underway on issues relating to availability, insurance, freight and payment arrangement for Russian oil, he said. –Bloomberg
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