Oil Corporation of India buys Russian crude oil at a discount of $20 to $25: Report
New Delhi:
The Indian Oil Corporation (IOC), the nation’s leading oil company, has purchased up to 3 million barrels of crude oil offered by Russia at a steep discount to popular international rates, sources said. know.
The purchase, conducted through a merchant, was the first since Russia invaded Ukraine on February 24, putting international pressure on the isolation of Russian President Vladimir Putin’s government.
Sources with knowledge of the matter said that the IOC purchased Urals crude for May delivery at a discount of $20-25 per barrel from the Brent price.
As the US and other Western nations imposed sanctions on Moscow, Russia began offering oil and other commodities at discounted prices to India and other major importing countries.
The IOC has purchased modified terms requiring sellers to ship to Indian shores to avoid any complications that sanctions could lead to in arranging transportation and insurance.
Unlike the sanctions the US has imposed on Iran over its controversial nuclear program, oil and energy trade with Russia is not prohibited. This means that international payment systems are available to settle any purchases made from Russia, they said.
This is not the case for Iran, which has been cut off from the international system of money transfers and security, SWIFT. In addition, companies or institutions that invest in or buy oil from Iran are also sanctioned.
India, which imports 85% of its oil needs, is looking to cut energy bills in a spiral through buying from wherever possible at cheaper rates.
On Monday, Oil Minister Hardeep Singh Puri told Rajya Sabha that the country would evaluate Russia’s offer to sell crude oil at a discounted price after considering aspects such as insurance and freight required to convert the oil. data from non-traditional suppliers.
“I would like to reiterate that in a situation like the one characterized by the pandemic of the past two years and the past few weeks due to war or military action taking place between Russia and Ukraine, the government will find out all available options,” he said.
The minister said he had discussed it with Russian government officials.
“Discussions are currently underway. Some issues are required to be resolved, such as the amount of oil available in Russia or in new markets or with new suppliers that may enter the market. . In addition, there are issues related to insurance, freight and a host of other issues, including payment arrangements,” he stated.
New Delhi has historic diplomatic and defense ties with Moscow and has called for an end to violence in Ukraine but has not condemned the invasion.
Many countries, including European ones, are still heavily dependent on fuel from Russia, the world’s second-largest crude exporter after Saudi Arabia.
India buys only 1.3% of its oil needs from Russia.
The White House said that Russia’s decision to take in discounted oil would not violate any US sanctions against Moscow.
US President Joe Biden last week announced a ban on imports of Russian oil and gas due to the country’s invasion of Ukraine, targeting the main artery of the Russian economy.
“Our message to any country is to comply with the sanctions that we’ve put in place, and that’s what we’ve got,” White House Press Secretary Jen Psaki told reporters at Tuesday’s daily news briefing. Recommendations”.
When asked about a media report about the possibility that India might be receptive to Russia’s offer to cut crude oil prices, Psaki said, “I don’t believe this would violate that (sanctions). ” GlobalData, a leading data and analytics company, said that given India’s neutral stance on the Russia-Ukraine conflict, Moscow’s supply of oil and other commodities at discounted prices would provide some relief. financial side.
“India’s efforts to diversify sources of imports will tend to reduce the financial burden on the government, thereby reducing the risk posed by high import bills. Furthermore, cheaper crude oil prices may have a negative impact on the economy,” Gargi said. can reduce production costs and help alleviate inflationary pressures. Rao, Economic Research Analyst at GlobalData.
