Analysts say Russia is reshaping exports so India can keep buying discounted crude

Industry analysts say Russia is already working to circumvent recent US sanctions to ensure India can continue importing large volumes of discounted Russian crude. Since the outbreak of the Ukraine war India has become the world’s second-largest purchaser of Russian crude, bought at heavy discounts amid western sanctions.

US measures from the end of November targeted buyers of oil from Rosneft and Lukoil, and Indian imports fell from an average of 1.7m barrels a day to roughly 1.2m barrels a day in December. Four of India’s seven biggest refineries are still primarily running on Russian oil, and the low price is hard to turn away from for a country that imports 90% of its oil.

Export data shows several new Russian oil exporters had emerged by December, likely acting as shadow middlemen between the big Russian firms and refineries such as those in India. Homayoun Falakshahi of Kpler said “the new players are emerging” and it was likely “just a matter of two or three months until the full supply chain gets reorganised”.

He added that continued purchases could represent savings of almost $4bn over a year. June Goh of Sparta Commodities said the discount was “just too attractive for the Indian refiners not to buy the oil” and that the market did not expect aggressive enforcement.

Key Topics

World, Russia, India, Rosneft, Lukoil, Us Sanctions