Russian oil has become too expensive for India

The rising cost of tanker freight makes Russian oil extremely expensive for Indian refineries. Those are already looking for alternative supplies in The Persian Gulf.

"Indian oil refineries are increasingly turning to the purchase of crude oil from the Persian Gulf countries, reducing the volume of supplies from their main supplier — Russia. The reason for this was extremely high freight costs, which make it economically unprofitable to transport oil over long distances," Bloomberg writes.

Traders cited the example of Iraqi oil, which is transported by shuttle tankers through the Strait of Hormuz — secretly from Iran.

So, some batches of Iraqi oil are sold at a discount of more than $ 25 per barrel relative to the Dubai reference grade, and taking into account the delivery, the final cost turns out to be several dollars per barrel lower than the price of the Brent reference grade.

"At the same time, Russian oil is offered at a premium of about $ 2 to the reference price, which makes purchases from India's largest supplier economically inexpedient," the agency reports.

As EADaily reported, oil exports from the Persian Gulf countries have recovered. But now the price is being hit by the high cost of tanker freight — due to the complexity of logistics. Transportation costs can be a third of the price or more.