More crude oil from Russia has become available for Indian refiners as Ukrainian drone attacks have reduced the Russian refining capacity, an Indian government official Reuters on Monday.
Since the Russian invasion of Ukraine, India has relied on the discounted Russian crude banned in the West to reduce its crude import bill. Indian refiners have significantly increased their purchases of Russian crude, making India the second-largest buyer of Russia’s oil, behind only China.
However, the Trump Administration, facing difficult trade negotiations with India and the dragging war in Ukraine, has singled out India as a culprit for buying Russian oil.
Indian officials have repeatedly said the country would continue to buy the cheap Russian oil. Officials are now reportedly telling Trump Administration officials that India could cut crude imports from Russia if the U.S. were to allow flows from Iran and Venezuela.
India’s crude oil imports from Russia are estimated to have dropped by about 100,000 barrels per day (bpd) in September compared to August as Indian refiners expand crude sources amid ongoing U.S.-India trade talks and U.S. pressure on the world’s third-largest crude importer to stop importing Russian oil and prop up the Kremlin’s energy revenues.
While Indian crude oil imports from Russia slipped last month, they still accounted for about a third of all crude arrivals in the country. Refiners continue to buy the cheaper Russian crude, for economic reasons, India’s top officials say. But some refiners have started to diversify the risk by taking barrels from other sources, including the U.S., Brazil, and West Africa.
“Russian barrels remain central to India’s crude slate, but volumes are stabilizing at a lower plateau,” Sumit Ritolia, a lead analyst at Kpler, told Bloomberg last week.
Meanwhile, Russian President Vladimir Putin said on Friday that amid rising global energy demand, oil prices could jump above $100 per barrel if Russia’s oil is pushed out of the market.
By Charles Kennedy for Oilprice.com
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