Advertisement
Ukraine war: new sanctions on Russian oil create ‘challenges’ for India
- Russia was India’s top oil supplier in 2023, and refiners fear new sanctions will make it harder to get vessels for Russian oil and could drive up freight rates
- India rarely bought Russian oil before 2022 due to high freight costs, but now refiners benefit from lower prices, after Europe banned Russian oil imports
Reading Time:2 minutes
Why you can trust SCMP
Fresh US sanctions on Moscow threaten to dent Russian oil sales to India, the biggest buyer of Russian seaborne crude, and complicate efforts by Indian state refiners to secure annual supply deals, three industry sources familiar with the matter said.
Washington on Friday imposed sanctions to mark the second anniversary of Moscow’s invasion of Ukraine and retaliate for the death of opposition leader Alexei Navalny.
The sanctions target Russia’s leading tanker group, Sovcomflot, which Washington accused of being involved in violating the G7’s price cap on Russian oil, as well as 14 crude oil tankers tied to Sovcomflot.
Advertisement
Sources said Indian refiners are concerned the latest sanctions will create “challenges” in getting vessels for Russian oil and could drive up freight rates. That may narrow the discount for the oil, which is bought from traders and Russian companies on a delivered basis.
In addition, Moscow may have to push even more volumes through traders to shield from further sanctions risk, adding to uncertainties, the industry sources said, declining to be named because of the sensitivity of the matter.
Advertisement
India rarely bought Russian oil before 2022 due to high freight costs, but refiners in the world’s third-largest oil importing nation are now big buyers, benefiting from lower prices, after Europe banned Russian oil imports.
Advertisement
Select Voice
Choose your listening speed
Get through articles 2x faster
1.25x
250 WPM
Slow
Average
Fast
1.25x