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- India Buys 60 Million Barrels Russian Crude For April Amid Israel Iran War & Hormuz Crisis
New Delhi1 hour ago
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The crude oil supply chain has been badly affected due to the ongoing Israel-Iran war in the Middle East. To deal with this crisis, Indian refiners have decided to buy large quantities of oil from Russia.
According to the information, India has signed a deal with Russia for about 60 million or 60 million barrels of crude oil for delivery in the month of April.
After the Strait of Hormuz was affected, India was facing problems in supplies from Saudi Arabia and Iraq. To meet this shortage, India is now again relying on Russian oil.
Russian oil purchases doubled compared to February
According to data intelligence firm Kepler, this purchase from Russia for April is more than double that of February. However, this quantity is almost equal to that of March.
Due to supply stoppage due to tension in the Middle East, Indian companies are now looking for ways from where oil can be supplied without any interruption. For this reason, there has been a sudden increase in demand for Russian oil in the last few weeks.
Russian oil is costing up to $15 more than crude
The surprising thing is that the Russian oil which was once available to India at a huge discount, now has to pay a premium for it. According to reports, these deals have been booked at a premium (excess price) of $5 to $15 per barrel over Brent crude prices. This surge in prices is being seen due to lack of supply and high demand.
America allows India to buy Russian oil
A special discount given by America has a big role behind this purchase by India. The US has allowed India to take Russian oil cargoes that were loaded on ships before March 5.
Later the scope of this exemption was extended to March 12. This exemption was given specifically so that the oil shortage caused by the closure of the Strait of Hormuz could be removed.
Saudi and Iraqi oil stuck in Gulf countries
At the end of last year, due to American pressure, India had reduced the purchase of Russian oil and turned towards countries like Saudi Arabia and Iraq. But after the war started, most of the oil of these countries got stuck inside the ‘Persian Gulf’.
New Delhi officials expect the US to continue extending the deadline for its waiver until the situation in Hormuz returns to normal.
MRPL-Hindustan Mittal Energy returns to the market
Indian refining companies, which had stayed away from Russian oil since December, have now become active again. Companies like Mangalore Refinery and Petrochemicals Limited (MRPL) and Hindustan Mittal Energy Limited have made a comeback in the Russian market. The focus of these companies is now on accumulating stocks to meet domestic demand.
Imports from Venezuela also increased, 4 year record broken
Not only Russia, India is also increasing its dependence on Venezuela for its oil needs. According to Kpler data, India’s crude oil imports from Venezuela could reach 8 million barrels in April. This is the highest level since October 2020. India is also increasing contacts with South American countries to diversify its supply.
Russia is making good profits due to demand
Due to increasing demand and high prices from countries like India and China, Russia is making good profits. Russia is currently earning the highest export revenue since the start of the Ukraine war. Russian oil demand and earnings are at their highest after March 2022.
Market analysts say that India currently has no better option other than Russia, because the quality of Venezuelan oil is not like Russian oil and the route to the Middle East is unsafe.
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