/Reuters Agency
Indian Oil Corp, the country’s leading refinery, has purchased five shipments of Russian oil for delivery in December through non-sanctioned entities, according to traders, resuming purchases despite pressure from Washington on India to stop buying Russian crude.
Last week, Washington imposed sanctions on Rosneft and Lukoil, Russia’s two largest oil companies, stepping up efforts to pressure President Vladimir Putin to end the war in Ukraine.
Since then, many Indian refineries, including the state-owned Mangalore Refinery and Petrochemicals Ltd, HPCL-Mittal Energy Ltd and Reliance Industries -operator of the world’s largest refining complex- have stopped buying Russian oil.
However, IOC’s chief financial officer, Anuj Jain, has stated that his company will continue to buy Russian crude as long as the barrels comply with sanctions.
The European Union, the United Kingdom and the United States have imposed a series of sanctions against Russia for the war in Ukraine, including restrictions on shipping. These sanctions have forced Russia to sell its oil at heavy discounts, and in the last three years India has become the largest buyer of Russian seaborne crude.
IOC has purchased about 3.5 million barrels of ESPO crude at a price close to Dubai quotes for delivery at an east Indian port in December, according to a trading source. The sources did not reveal who the sellers were.
The refinery had previously canceled seven or eight shipments of Russian oil following the announcement of the latest US sanctions, as they were supplied by subsidiaries of sanctioned entities, two sources said.
The informants preferred not to be identified due to the sensitivity of the matter. Before the latest US sanctions, Rosneft was one of the main sellers of ESPO crude.
Most of the Russian ESPO crude from the Pacific port of Kozmino used to go to China. However, Chinese demand has decreased after state refineries suspended purchases following the US sanctions, while Chinese independent refineries have exhausted their import quotas. As a result, the price of ESPO crude has fallen, making it attractive for Indian buyers.
