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India Buys Russian Oil Amidst Middle East Conflict
25 Mar
Summary
- India booked around 60 million barrels of Russian oil for next month.
- Purchases resume following a US waiver related to Hormuz disruptions.
- Russia benefits from renewed demand and elevated oil prices.
Amidst escalating tensions in the Middle East, Indian refiners have committed to purchasing roughly 60 million barrels of Russian oil for delivery next month. This significant volume aims to alleviate supply chain concerns exacerbated by disruptions in the Strait of Hormuz. The renewed interest in Russian crude follows a US waiver, initially issued to permit the import of oil loaded before March 5, which has since been extended to accommodate ongoing supply issues.
India, a nation heavily reliant on oil imports, had previously reduced its intake of discounted Russian crude under US pressure. However, the current geopolitical climate and the effective closure of key shipping routes have prompted a shift back to Russian supplies, with refiners like Mangalore Refinery & Petrochemicals Ltd. and Hindustan Mittal Energy Ltd. re-entering the market. This strategic acquisition ensures continued energy security for India as the conflict persists.
Concurrently, Indian processors are diversifying their energy sources, with projected purchases of 8 million barrels of Venezuelan crude for April arrival, marking the highest volume since October 2020. Meanwhile, Russia is capitalizing on the increased demand and higher global prices, reportedly earning the most from its crude exports since March 2022.
