Despite fluctuations in monthly supplies, Indian refiners continue to increase purchases of Russian oil. At the same time, its costs are even higher. Russian oil discounts to India have decreased this year.
During the nine months of this year, Indian refiners imported 472 million barrels of Russian oil. This is 2% more than in January-September 2023. This is demonstrated by data from the Ministry of Commerce and Industry of India.
If in August raw material supplies reached a historic low of 32.3 million barrels, in September they increased to 51.96 million barrels, 37% more than the previous year. These differences may be due to the specifics of maritime fuel supply and the fact that some Indian refineries were carrying out maintenance work in the summer.
Significantly, local companies’ costs for Russian oil have increased further. If in nine months of 2023 they spent 33.4 billion dollars on raw materials, this year they spent almost 5 billion dollars more, 38.3 billion dollars. This could be explained by the higher prices of the North Sea benchmark Brent, to which the Russian Ural quotes are tied. , as well as lower discounts on oil from Russia.
For example, in September, judging by data from the Indian Ministry, the average price of Russian oil was $79 per barrel. This price also includes raw material shipping services to India. Compared to the average price of Brent, the average discount was about $3 per barrel.
Russia’s closest competitor in the Indian market, Iraq, sold oil to India in September at $76. At the same time, supplies remained approximately at the August level, 26 million barrels, and even decreased compared to the first months of autumn 2023.
On December 5, 2022, the EU banned oil imports and, together with the G7 countries, introduced a Russian oil price cap of $60. National companies had to redirect large volumes to new markets. The largest of these was India, to which Russia has also become its largest supplier since 2023.
