India’s imports of Russian oil rose to a new record high in June 2023, marking the highest level in 10 months, according to energy market research firm Kepler.
At the same time, some oil refineries in New Delhi have started paying some shipments in Chinese yuan.
The head of the crude analytics sector in the company, Victor Katona, said that India’s imports of Russian oil amounted to 2.2 million barrels per day during the past month, according to Bloomberg Agency, today, Monday, July 3, 2023.
The giant Asian country benefits from Russian oil price discounts, which were subject to sanctions and price caps by Western countries, following Moscow’s invasion of Ukraine in February 2022.
On December 5, 2022, the seven industrialized countries set a price ceiling for Russian crude at $60 a barrel, and on the same day, European countries banned the import of seaborne Russian oil.
And in February 2023, the Group of Seven imposed a price cap on Russian oil derivatives, according to information seen by the specialized energy platform.
Bypassing Saudi Arabia and Iraq
Shipments of Russian oil destined for India exceeded the carriers of crude coming from Saudi Arabia and Iraq last May, according to Kepler data.
With this record increase in Russian oil imports to India, New Delhi will have approached the peak of imports for reasons related to the readiness of the infrastructure to receive these large quantities, in addition to the desire of the Asian country to maintain good relations with the main sources of supplies, according to Kepler.
Saudi Arabia and Iraq are the main sources of supplies to India, but they have been overtaken by Russian oil for several months now.
And the Indian Oil Minister, Hardeep Singh Puri, confirmed in statements, during the month of June, that his country is seeking to increase its imports from Iraq, which currently amount to one million barrels of oil per day, to raise the total Indian oil supplies, which amount to about one billion barrels, during The 18th meeting of the Joint Indian-Iraqi Committee for Economic and Technical Cooperation was held in Baghdad.
Imports decline
The energy research company “Kpler” expected that India’s imports of Russian oil would decline during the month of August. Because of the poor supply of raw materials from Moscow.
The state-owned Indian Oil Company was the largest buyer of Russian oil in the past two months, and private sector Reliance Industries ranked second for the volumes the country received in the same period, according to Bloomberg TV.
Kepler indicated that India’s imports of Russian oil, Ural crude, also achieved a new record, reaching 1.2 million barrels per day last June.
Last May, India’s imports of Russian oil amounted to 1.95 million barrels per day, while imports from Saudi Arabia and Iraq fell.
India obtained 40% of oil imports from Russia, which led to a decline in the exports of the two Arab countries to it to the lowest level since September of 2021, according to what was reported by the “Live Mint” website, today, Monday, July 3, 2023.
Payment of Russian oil in yuan
India buys 80% of its oil from abroad, and New Delhi is the third largest buyer of crude in the world.
Government data indicated that the price of Russian oil, which India bought last April, amounted to $500 per ton (68.21 per barrel), compared to $570 per ton for Iraqi crude, and $637.4 per ton for Saudi crude.
Sources close to the matter said that India has started paying dues for Russian oil in Chinese yuan. This facilitates the flow of oil, especially since Moscow was removed from the dollar and euro payment system, according to Reuters, today, Monday, July 3, 2023.
Three sources indicated that the state-owned oil refinery has started paying dues for purchasing Russian crude in Chinese yuan.
And two of the three sources added that there are – at least – two out of every 3 oil refineries belonging to the private sector that have started paying a percentage of the dues in yuan.
It is noteworthy that there have been Indian attempts since last March to persuade Russia to pay dues for oil purchases in Indian rupees.
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