India’s largest refinery resumes purchases of Russian oil from sanctioned companies

Despite US sanctions, an Indian refiner is buying Russian oil again – now from companies not under Western sanctions.

This was reported by enkorr with reference to Reuters.

India’s largest refinery Indian Oil Corporation (IOC) has purchased five batches of Russian crude oil for delivery in December from companies not under sanctions. Thus, the company effectively resumed purchases after a short break, despite pressure from Washington, which calls on New Delhi to reduce imports from Russia.

Last week, the US expanded sanctions against Rosneft and Lukoil – the two largest oil giants of Russia. This move was part of attempts to limit the financing of Russia’s war in Ukraine.

After the introduction of new restrictions, a number of Indian refineries – including Mangalore Refinery and Petrochemicals, HPCL-Mittal Energy and Reliance Industries – temporarily stopped buying Russian oil. At the same time, Indian Oil’s CFO Anuj Jain said that the company would continue imports “if supplies meet current sanctions requirements.”

According to one of the traders, IOC bought about 3.5 million barrels of ESPO oil at a price close to Dubai quotes, with delivery to the eastern Indian port in December. The names of the sellers were not disclosed.

Indian Oil had previously canceled seven to eight shipments of Russian oil after the US sanctions were imposed, as they came through subsidiaries of sanctioned companies. Rosneft remained the main supplier of ESPO before the restrictions were imposed.

Usually, most of the ESPO oil from the Pacific port of Kozmino went to China. However, due to a decrease in demand — after state-owned Chinese refineries stopped purchases and independent refineries exhausted import quotas — ESPO oil prices fell. This made it more attractive to Indian buyers.