New Delhi: Indian refiners may face stiffer competition for Russian energy after the US allowed other countries to also buy Moscow’s sanctioned oil and refined products to temper surging global crude prices.
Brent traded around $100 a barrel on Friday despite the US move to free up Russian oil, as markets focused on Iran’s hardening stance on blocking the Strait of Hormuz.
The US had permitted India on March 5 to purchase sanctioned seaborne Russian volumes to ease global supply pressure caused by the Iran war. It has now extended the same benefit to other countries.
Russia currently has limited seaborne volumes and competition from multiple buyers could push up premiums on those barrels, industry executives said.
Russia has been selling crude at a discount since sanctions were imposed by several countries led by the US following its invasion of Ukraine about four years ago. However, supply disruptions from the Gulf conflict have boosted premiums on Russian crude.
“To increase the global reach of existing supply, US Treasury is providing a temporary authorization to permit countries to purchase Russian oil currently stranded at sea. This narrowly tailored, short-term measure applies only to oil already in transit,” US treasury secretary Scott Bessent said on X.
The US move applies only to Russian cargoes already loaded on ships as of March 12.
About 30 tankers carrying Russian oil, including 25 crude cargoes, are currently floating in Asian waters, according to Bloomberg. India and China have been the main buyers of Russian oil since the Ukraine war triggered sanctions on Moscow, forcing it to offer crude at discounted prices.
Soon after the US permitted India to buy sanctioned Russian cargoes, Indian refiners struck several deals, with state-run companies buying as many as 22 crude cargoes, an industry executive said.
