India could import more Russian oil after price differential widens

Recent US actions against companies alleged to have been carrying oil at above the $60 a barrel price cap for crude, plus a general easing in global oil prices, could see India boost imports from Russia, a senior Indian government official, speaking on a condition of anonymity, told Reuters on Friday December 9th.

While Brent Crude remains well above the $60 level, the differential between it and Russian “benchmark” Urals widened after the action by the US Treasury.

Three sanctioned vessels, the Kazan, Ligovsky Prospect and NS Century – had regularly supplied oil to India. NS Century was on its way to India when the sanctions were imposed. The vessel has since then floated near Colombo.

Russia’s flagship grade Urals had fallen since late November to below that level.

India, which is the world’s third-biggest oil importer and consumer, had emerged as the biggest buyer of Russian seaborne oil. A percentage of that crude had been refined in India and then re-exported to G7 and EU countries, making a tidy profit for India and enabling western European countries to use Russian fuel indirectly but without breaching the sanctions.

The Indian official said there would not be any impact on India’s intake of Russian oil due to Western sanctions on ships, because enough vessels were available in the market. He also noted that India buys Russian oil on a delivered basis.