Russia slashes oil price for India amid US sanctions pressure
What's the story
After the US imposed sanctions on Rosneft and Lukoil, Indian refiners have been offered Russian crude oil at a steep discount. The price of Urals for Indian refiners has dropped by as much as $7 per barrel compared to Dated Brent on a delivered basis. The offer is for cargoes loading in December and arriving in January.
Trade disruption
Sanctions impact on Russian oil trade with India
The recent sanctions on Rosneft and Lukoil have largely disrupted the trade that flourished after Russia invaded Ukraine in 2022. Most Indian refiners have avoided ordering Russian crude for delivery after the sanctions were imposed last week. However, some refiners are now considering buying Russian oil from non-sanctioned sellers due to the reduced Urals prices.
Market dynamics
Limited availability of non-sanctioned Russian oil
Despite the change in attitude, only about a fifth of the offered cargoes are from non-blacklisted entities. Before the sanctions were imposed, Urals was being offered at a discount of about $3 per barrel. Since then, Indian refiners have increased crude imports from other regions such as the Middle East to make up for any shortfall in supply.