India pivots oil strategy amid US sanctions, limiting Russia trade

29 Feb, 2024

India pivots oil strategy amid US sanctions, limiting Russia trade

Russia remains the primary oil supplier to India, yet indications suggest that refiners are diversifying their sources. Comparatively, imports from Saudi Arabia have surged by 22% this month compared to January, with Reliance Industries Ltd., the largest private refiner, recording its highest volume since May 2020, as per data from Kpler.

Indian refiners express interest in acquiring more Russian oil, but any significant increase would necessitate US approval, undisclosed executives revealed. Despite being priced only $2-$4 per barrel cheaper than other sources, substantial discounts seem unlikely due to heightened competition, especially from China. Following the war, discounts widened to over $30.

Post-war, India's imports of Russian oil spiked as refiners capitalized on discounted barrels rejected by other buyers. At its peak last year, Russian crude accounted for nearly half of the nation's purchases, but recent US sanctions have left some cargoes stranded.

Additionally, Moscow aims to receive payments in yuan, citing increased scrutiny from certain banks regarding previous transactions settled in dirhams. This shift reflects evolving dynamics in oil trade negotiations, according to insights from a refinery executive and a government official.