Sources familiar with the Indian firms’ plans told Bloomberg on Monday that India’s demand for cheap Russian crude is insatiable, with some of the country’s largest refiners looking to negotiate six-month supply deals with Russia’s oil giant, Rosneft.
According to Bloomberg’s sources, state-owned refiners Indian Oil Corporation, Hindustan Petroleum, and Bharat Petroleum, as well as private companies such as conglomerate Reliance Industries and partly-Rosneft-owned Nayara Energy, are seeking greater supplies from Rosneft. The terms of the agreements are still being worked out, but Rosneft is likely to handle the insurance and transportation coverage.
According to the sources, the further purchases would be in addition to the other agreements under which India buys Russian petroleum. India’s imports of Russian oil are not illegal in and of themselves, but they have attracted the attention of Western allies seeking to stifle Russia’s oil profits.
Russian crude is selling at a historic discount to Dated Brent, luring India’s price-sensitive purchasers to the point that, according to shipment-tracking data collated by Reuters, Russia became the fourth largest oil supplier to India in April, up from tenth position in March.
India is the world’s third-largest crude importer, with imports accounting for almost 80% of its oil consumption. According to data from Refinitiv Eikon quoted by Reuters last week, India bought almost 24 million barrels of Russian crude in May, up from 7.2 million barrels in April, which was the previous peak.