Indian refiners have bought about 60 million barrels of Russian oil for delivery next month, according to people familiar with the matter, easing concerns about supplies as flows are choked by the Middle East war.
The sources, who requested anonymity due to the sensitivity of the trade, said the shipments were booked at premiums of between $5 and $15 per barrel over Brent crude. The volume is similar to that of purchases for the month, but more than double that of February, according to data intelligence firm Kpler.
This buying spree came in the wake of a US waiver that allowed India to receive Russian oil that had already been loaded on ships before March 5 to make up for the shortfall caused by the effective closure of the Strait of Hormuz. The measure was later expanded to include other countries and updated to allow the purchase of crude oil already at sea before March 12.
The South Asian country relies heavily on imported oil, and became a major buyer of Russian crude at a discount after invading Ukraine in early 2022. However, India sharply reduced its purchases from late last year under US pressure, turning instead to barrels from Saudi Arabia and Iraq, much of which became trapped within the Persian Gulf after the outbreak of war.
The sources said that officials in New Delhi expect the US exemption to be extended as long as the unrest in Hormuz continues. Refiners such as Mangalore Refining and Petrochemicals Ltd and Hindustan Metall Energy Ltd, which had avoided Russian oil since December, have returned to the market, they said.
In addition to buying more Russian oil, Indian processing companies are also looking elsewhere to diversify their supplies as the war continues. The country’s purchases of Venezuelan crude for April arrivals are expected to reach 8 million barrels, the highest level since October 2020, according to Kpler.
Meanwhile, Russia is reaping bumper profits thanks to renewed demand and rising prices for its oil. The Kremlin has been making the most profits from its crude oil exports since March 2022, shortly after Moscow’s forces poured into Ukraine.
