Russian oil loses price advantage: India cuts purchases

Indian oil refining companies are reducing purchases of Russian oil with delivery in November. The main reason is the rise in price of the Urals grade, which has almost lost its price advantage over Middle Eastern oil. Increased competition from China also complicates purchases for Indian refiners, <\/b>Bloomberg<\/strong> reports.<\/p>

According to agency sources, Russian oil from Baltic ports is now offered at a premium of over $10 per barrel to the Dated Brent benchmark. If previously Urals was sold at significant discounts, now its price has approached the prices of Middle Eastern grades.<\/p>

As a result, it becomes more profitable for Indian refineries to purchase raw materials from the Persian Gulf countries. Such supplies require less transportation time and are cheaper in terms of logistics, especially against the background of rising freight costs for oil tankers.<\/p>

Russia's share in India's oil imports decreased from almost 56% in July to 35% in September, according to data from the analytical company Kpler. In September, Indian refineries imported approximately 1.88 million barrels of Russian oil per day, compared to 2.83 million barrels per day at the July peak.<\/p>

At the same time, according to Bloomberg tanker tracking, the average volume of Russian oil shipments to India over the four weeks to October 4 fell to 310,000 barrels per day. This is the lowest figure since March 2022. This statistic refers to seaborne shipments, not the total actual imports received by India during the month.<\/p>

The change in the structure of purchases is also influenced by the recovery of exports from the Middle East. According to Financial Express, in September India increased oil imports from this region by 74% compared to August - to 2.1 million barrels per day. The largest suppliers were Iraq, Saudi Arabia, and the United Arab Emirates.<\/p>

Shell CEO Wael Sawan reported on October 6 that oil supply volumes from the Middle East have recovered to approximately 80% of pre-war levels. At the same time, risks to shipping in the Strait of Hormuz remain high due to Iranian attacks on tankers.<\/p>

Additional pressure on Russian exports comes from China. Due to the reduced availability of Iranian oil, Chinese refiners are more actively purchasing Russian crude, increasing competition with Indian companies. According to Kpler analysts, this factor also contributes to the rise in Urals prices.<\/p>

At the same time, the reduction in purchases is not a consequence of an official decision by New Delhi to abandon Russian oil. According to Bloomberg sources, the Indian government has not required oil refining companies to reduce imports due to the threat of American tariffs. Currently, economic supply conditions play a greater role in buyers' decisions.<\/p>

After the start of Russia's full-scale invasion of Ukraine, India became one of the main markets for Russian oil, which a significant part of European buyers abandoned. However, the recovery of supplies from the Persian Gulf and the rise in the cost of Urals are gradually shifting trade flows in favor of Middle Eastern exporters.<\/p>

Based on materials from: Bloomberg<\/a>, Financial Express<\/a>, Mint<\/a><\/p>