New Delhi: Reliance Industries, India’s top buyer of Russian crude, is curtailing purchases and preparing to stop imports from sanctioned Russian entities to comply with Western sanctions and safeguard access to US and European markets, as per people familiar with the matter and shipping data.
Reliance imported 534,000 barrels per day (bpd) in October – 24 per cent lower than September and 23 per cent below the April-September average, according to Kpler, a global real-time data and analytics provider. Russia’s share in Reliance’s crude slate fell to 43 per cent in October, from 56 per cent in September.
Rosneft-backed Nayara Energy, however, ramped up its purchases last month, being entirely reliant on Russian volumes.
To offset the Russian decline, Reliance leaned on the Middle East – Saudi volumes surged 87 per cent and Iraqi supplies 31 per cent, pushing their combined share to 40 per cent in October, up from 26 per cent in September.
Complying with sanctions
Imports from the US also nearly doubled, rising to around 10 per cent of Reliance’s total crude intake, from 5 per cent in September.
The October decline, however, wasn’t triggered by the latest US sanctions on Rosneft and Lukoil, Russia’s two largest oil exporters, but by earlier uncertainty—the Trump administration’s pressure campaign, punitive tariffs on Indian exports that kicked in late August, and the European Union (EU) sanctions announced in July that take effect in January, the people said.
Russian cargoes received in October would have been ordered in August, as orders are placed roughly a month in advance of loading with tankers taking another month to reach India.
The latest US sanctions have introduced a more direct constraint on RIL as Rosneft is contracted to supply the Indian refiner and retailer about 500,000 bpd under a term deal. Besides, continued purchases from a sanctioned entity carry the risk of secondary sanctions.
“RIL just can’t afford to violate sanctions. It has too much exposure to the US. Some of the biggest tech companies have invested in its tech ventures,” one of the people cited earlier said, adding that the company aims to stop crude cargoes from sanctioned Russian entities after the November 21 deadline for US sanctions wind-down period.
Reliance may restore Russian volumes if the restrictions are eased in future, he said.
RIL did not respond to ET’s queries.
Reliance last week confirmed it will comply with international sanctions.
An EU clarification issued last month explained how refiners can still export fuels to Europe even if they import Russian crude. “If Russian crude oil can be segregated and processed separately by the refinery, import into the EU is allowed, subject to proving that the petroleum product exported to the EU comes from the ‘production line’ using non-Russian oil,” the EU said.
If a refinery can’t segregate Russian crude, it can still export to the EU by proving that no Russian oil has entered that production line in the past 60 days, it added.
