India's Russian oil imports to hit 3-year low next month
What's the story
India's imports of Russian oil are projected to fall to a three-year low in December, according to trade and refining sources of Reuters. The decline comes as refiners look for alternatives to comply with Western sanctions. The United States, European Union, and UK have all imposed stricter sanctions on Moscow over its actions in Ukraine.
Sanction details
US sanctions target major Russian oil producers
The latest US sanctions specifically target top Russian oil producers Rosneft and Lukoil. Buyers of Russian oil were given until November 21 to end their dealings with these companies. Meanwhile, the EU has set a January 21 deadline after which it will reject fuel from refineries that processed Russian crude within 60 days of the bill of lading.
Refining strategies
Indian refiners exercise caution
In light of the new US sanctions, Indian state refiners are being extra cautious. A refining source told Reuters that India is likely to import between 600,000-650,000 barrels per day (bpd) of Russian oil in December. This includes imports by Indian Oil, Nayara Energy and delivery of some November-loading cargoes for Reliance Industries.
Market shift
Halting Russian oil purchases
Most Indian refiners, including Mangalore Refinery and Petrochemicals Ltd., Hindustan Petroleum, and HPCL-Mittal Energy Ltd, have stopped buying Russian oil. State-run companies such as Indian Oil and Bharat Petroleum have also said they will only buy from non-sanctioned entities. Nayara Energy, which is partly owned by Rosneft, is processing Russian oil exclusively after other suppliers withdrew due to British and EU sanctions.