Saudi offer better discounts compared to Russian oil
India had outright rejected Unilateral USA sanctions on Russian oil and gone in for oil imports from Moscow, primarily because of huge discounts offered. Now there has been a significant shift in India’s oil import patterns because of similar discounts from nearer home.
In December, India saw a notable increase in its imports of Saudi Arabian oil, while its purchases of Russian oil plummeted to an 11-month low. This decline prompted Indian Oil Corp (IOC) to source alternatives from the Middle East due to low prices.
Though imports from Russia are again likely. Further certain reports regarding payment issues to Russia are just a bunch of lies being spread and nothing else. This has been amply clarified by te Indian oil minister himself.
IOC, the leading refiner in India, was procuring the Sokol variant of Russian oil under an annual agreement with Rosneft, the Russian oil major. The annual contract has already been supplied. Now with similar prices offered by Saudis IOC has resorted to sourcing from the Middle East also.
So no wonder an analysis based on data from flow tracking agencies Vortexa, Kpler, and LSEG indicated a substantial drop in India’s oil imports from Russia, estimated to be between 16% and 22% in December. In contrast, imports of Saudi oil showed an increase of approximately 4% during the same period, according to data from Kpler and Vortexa.
While the monthly import data suggested a significant decline in India’s purchases of Russian oil, industry experts have dismissed suggestions that India’s interest in the Sokol grade has ended. Viktor Katona, lead crude analyst at Kpler, highlighted that despite the decrease, three new Sokol cargoes en route to India indicate a potential continued interest in this particular grade.
Recent ship tracking data from Kpler and LSEG identified several vessels, including Aframax ships NS Century, NS Commander, Sakhalin Island, Lityny Prospect, and Krymsk, along with a very large crude carrier Nellis transporting Russian Sokol oil intended for IOC. Among these vessels, the NS Century, previously facing US sanctions for pricing Russian oil above the G7’s set cap of $60 a barrel, has been floating near Colombo.
The evolving dynamics in India’s oil imports, particularly the offer from Saudi Arabia underscore the growing affinity between the two countries and fluctuations in the global oil market. It also reflects the intricate balance of geopolitical and economic factors at play.
