One of the largest buyers of Russian oil, India, is reducing purchases due to increased prices due to high ship freight rates. This is written by The Times of India, citing sources in the industry. According to the publication, local refineries are increasing their purchases of oil from the countries of the Persian Gulf and Africa.
“Including freight, the cost of delivering Russian oil turns out to be $5-7 more expensive compared to similar grades from other countries, such as Murban from the UAE,” a source in the oil market said.
According to him, Russian oil has ceased to be the cheapest and loses in price and speed of delivery to varieties from Africa and the Middle East. In September, India imports 2 million tons of oil from Russia, which is almost one and a half times less than in August - 3.55 million tons. At the same time, India received 2.35 million tons of oil from African countries in September, against 1.16 million tons in August.
Planned shutdowns of Indian oil refineries could also have affected the reduction in the volume of purchases of Russian oil. The publication notes that Indian Oil Corp, Reliance Industries, Bharat Petroleum and Nayara Energy reported on technical work at their plants in September. Another reason, according to the publication, is a possible increase in oil supplies to China, which could intercept part of the flow to India.
After the start of the war in Ukraine, Western countries imposed sanctions, including on Russian oil, the European embargo comes into force on December 5, but direct deliveries to the EU are already banned, since Russian ships are prohibited from entering European ports. Under these conditions, Russia began to look for buyers of its oil in the East, with China and India becoming the main consumers. However, this is not the first time New Delhi has signaled a reduction in supplies, and the country's authorities are seriously considering the possibility of joining the decision of Western countries to impose a ceiling on oil prices from Russia.