India buys Russian oil with a surcharge: who will get the bonus?

Indian refineries are buying up additional millions of barrels of Russian oil and started doing so even before the US granted them a monthly permit. Deliveries are being restored, and customers no longer have a discount — they pay at a premium.

"In recent days, Indian refineries have already purchased more than 10 million barrels of Urals crude oil, paying surcharges to the Brent price for shipments, including freight and shipping costs. Prices are $ 12 dollars per barrel higher than in previous weeks," writes Bloomberg.

According to the agency's source, Indian state oil refineries have ordered 20 million barrels of Russian oil with deferred payment.

Bloomberg data is confirmed by Kpler information. The 18 tankers that carry Urals now indicate that they are heading to India.

"Refineries can quickly increase purchases again, potentially returning volumes above 2 million barrels per day in the near future," analyst Sumit Ritolia told the agency.

Indian refineries are restoring purchases of Russian oil after the Iranian crisis and shipping in The Strait of Hormuz has stopped. This threatens the fact that local factories are left without the main source of oil — from the Persian Gulf countries.

Earlier, Russian Urals traded at a significant discount to the benchmark Brent, as India reduced purchases due to sanctions and pressure from Washington, and China had to accept unclaimed cargoes.

Yesterday, the United States granted Indian refineries a month's exemption for the purchase of Russian oil, which accumulated on tankers in the Indian Ocean and left Russian ports before January 12. According to Bloomberg, there are more than 15 million barrels in the Indian Ocean, and another 7 million in Singapore.

An important question is who will get the prize for Russian oil. Raw materials are sold through intermediaries, and batches in tankers may already belong to them. At the same time, back in December, the costs of their services, insurance and tanker freight took almost a third of the price, $ 20. While for the Indian refineries themselves, the real discount was up to $ 5 per barrel. According to the Ministry of Economic Development, the average price of Russian oil was about $ 45, and data from the Ministry of Trade and Industry of India show that local refineries bought raw materials for $ 65. Now the price in Indian ports can exceed $ 85.