Indian refiners have stepped up purchases of Russian crude as they lock in supplies for the coming month, with around 60 million barrels secured, according to people aware of the developments. The move comes as disruptions linked to the ongoing Middle East conflict continue to affect global oil flows.The cargoes have reportedly been contracted at premiums ranging between $5 and $15 per barrel over Brent, people told Bloomberg, speaking on condition of anonymity. The overall volume is similar to the purchases made for the current month, while majorly surpassing the levels seen in February, based on estimates from data intelligence firm Kpler.
The latest buying activity comes after a waiver issued by the US, after which India has turned towards imports of Russian oil, already been loaded onto vessels before March 5. The measure was introduced to help address supply constraints arising from the effective closure of the Strait of Hormuz, and was later broadened to include additional countries, with updates permitting crude already at sea before March 12 to be purchased.India, which depends heavily on imports to meet its energy needs, had emerged as a major destination for discounted Russian crude following the Russia-Ukraine conflict in 2022. However, purchases were scaled back amid pressure from the United States, prompting refiners to source more oil from Saudi Arabia and Iraq. A large portion of those shipments subsequently remained within the Persian Gulf after the escalation of the current conflict.Officials in New Delhi are expecting the US waiver to continue as long as disruptions in the Hormuz route persist, according to the people cited. Refining companies such as Mangalore Refinery & Petrochemicals Ltd. and Hindustan Mittal Energy Ltd, which had stayed away from Russian supplies since December, have now resumed participation in the market.At the same time, Indian refiners are broadening their sourcing strategy to manage uncertainty in global supplies. Imports of Venezuelan crude for April delivery are projected at about 8 million barrels, the highest level since October 2020, according to Kpler. Venezuela is thus playing a larger role in India’s diversification efforts.Russia, meanwhile, is benefiting from the renewed demand and higher pricing environment, with the Kremlin seeing elevated earnings from crude exports, marking its strongest performance since March 2022, shortly after the conflict in Ukraine began.Earlier this month, Reliance Industries Ltd. reportedly purchased 5 million barrels of Iranian crude, following adjustments in sanctions policy that enabled such transactions. This comes after US administration gives a 30-day waiver for Iranian oil already in transit. The exemption covered cargo loaded on or before March 20, including shipments on sanctioned vessels, provided delivery and discharge were completed by April 19.
