India snaps up 60 million barrels Russian crude despite higher premiums amid Iran war

Indian Oil Refineries has reportedly secured the purchase of approximately 60 million barrels of Russian oil to be delivered in April. Bloomberg reported that the cargoes were snapped up at premiums between $5 and $15 per barrel, citing an unnamed source. The surge in buying was enabled by the 30-day US-Treasury waiver allowing India to take delivery of Russian oil. The purchase was intended to make up for the energy scarcity, as the war in West Asia continues to disrupt the energy flow to India and other Southeast Asian countries.

The Bloomberg report also emphasised that India was desperate for Russian crude despite losing the heavy discounts to the global benchmark it was enjoying previously. The volume of the purchase was almost consistent with its monthly requirements, but twice the volume of purchase in February, when there was no waiver. The US issued the waiver to ease the burden of the war in Iran, as oil prices surged in the future and the spot market.

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According to shipping data from earlier this month, as the Washington announced waiver, the Indian appetite for Russian crude surged, with several China-bound tankers being redirected towards India. In the first two weeks of March, the volume of Russian crude on the sea dropped by nearly 20 million barrels, which is equivalent to 2 million barrels per day. This has resulted in a windfall for Putin's oil revenue, the highest since March 2022, returning it to the number one position, as reported by Reuters.

Bloomberg reported that Indian refiners, including Mangalore Refinery & Petrochemicals Ltd. (MRPL) and Hindustan Mittal Energy Ltd., which had earlier shifted to the purchase of Iraqi and Saudi Arabian crude in recent months, have again shifted to Russian crude. India is also looking to diversify its sourcing as the war is refusing to die down, according to the Bloomberg report, citing Kpler data, Indian imports of Venezuelan crude for April are projected at 8 million barrels, marking the highest level since October 2020.