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India’s Refiners Brace For Major Disruption to Russian Oil Supply
Indian refiners expect their supply of cheaper Russian crude to be severely crippled with imminent U.S. sanctions expected to be slapped on tankers transporting Russia’s oil, refining sources in India told Reuters on Friday.
Indian refiners understand that the outgoing Biden Administration is set to target in a new sanctions package more than 180 tankers that transport Russian crude oil, according to Reuters’s sources. The U.S. Administration is also expected to designate Russia-based maritime insurance service providers Ingosstrakh Insurance Company and Alfastrakhovanie Group.
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Reports emerged earlier this week that the Biden Administration is set to slap more sanctions on Russia’s oil exports by targeting tankers hauling Russian crude and products.
“It is going to be a big package,” a source familiar with the outgoing administration’s plans told Reuters on Monday.
The current Administration plans to target vessels that carry Russian oil above the $60 per barrel price cap that Western allies have imposed on Russian crude and petroleum products. The scope of the upcoming sanctions is expected to include persons involved in networks that trade Russia’s oil above the G7 price cap.
The Biden Administration is looking to stifle Russia’s oil revenues and support Ukraine more ahead of the inauguration of U.S. President-elect Donald Trump, who has said that the U.S. cost of supporting Ukraine is too high.
Expecting the imminent sanctions, India is now bracing for a major disruption to Russian oil supply, which is currently the single largest source of crude for the world’s third-largest oil importer.
Over the past two years, India has become a key buyer of Russia’s oil, while the attractiveness of cheaper crude supply has made Russia the single biggest supplier of oil to India.
But India imported lower volumes of Russian crude in November while it boosted purchases of Middle Eastern grades, as Russia exported lower volumes overall while some Indian refiners were undergoing maintenance.
India imported 1.52 million barrels per day (bpd) of Russian crude oil in November, down by 13% from October, according to ship-tracking data that Reuters has obtained from sources.
At the same time, imports from the Middle East into India jumped by 10.8% in November compared to the prior month.
Still, Russia continued to be the top crude supplier to India in November, ahead of Iraq and Saudi Arabia.
By Charles Kennedy for Oilprice.com
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Charles Kennedy
Charles is a writer for Oilprice.com
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