Despite US President Donald Trump’s pressure on India to stop purchasing crude oil from Russia, state-run Indian Oil Corporation has placed an order for five cargoes scheduled for December delivery.
According to a Reuters report quoting sources, IOC has bought five Russian crude oil shipments from non-sanctioned entities. The Donald Trump administration recently announced sanctions on two of Russia’s largest oil firms - Lukoil and Rosneft.
Even as Indian refiners are expected to adhere to the sanctions, they are also expected to continue procurement of Russian crude from non-sanctioned firms.
Russian oil continues to flow to India?
Indian Oil Corporation has procured approximately 3.5 million barrels of ESPO crude at prices comparable to Dubai quotes, scheduled for December delivery to an eastern Indian port, a trade source was quoted as saying.
Also Read | Trump sanctions: Short-term disruption guaranteed, but will India & China completely stop buying Russian oil? Why it’s highly unlikely
The company had previously withdrawn from seven to eight Russian oil cargo agreements following recent US sanctions announcements, as these supplies originated from sanctioned entities' subsidiaries, the report said.
In an analyst call following the earnings announcement, IOC Director (Finance) Anuj Jain affirmed the company's intention to continue Russian crude procurement whilst complying with sanctions.
"We are absolutely not going to discontinue (buying Russian crude) as long as we are complying with the sanctions. Russian crude is not sanctioned. It is the entities and the shipping lines which have got sanctions," he said according to TOI.
"If somebody comes to me with a non-sanctioned entity, and the (price) cap is being complied with, and the shipping is okay, then I will continue to buy it", Jain added.
According to the report, after US sanctions several Indian refiners have suspended their Russian oil purchases , including state-operated Mangalore Refinery and Petrochemicals Ltd, HPCL-Mittal Energy Ltd, and Reliance Industries , which operates the world's largest refining facility.
Also Read | Sign of oil trade disruption after Trump sanctions? Russian crude oil tanker headed for India takes a U-turn; now idling in Baltic Sea
Earlier this week, officials told TOI that while sanctions impact four Russian oil companies, Rosneft, India's main supplier handling approximately 45 per cent of Russian crude imports to India, operates as an aggregator instead of a direct producer, allowing non-sanctioned organisations to continue supply operations.
Russia faces extensive sanctions from the European Union, the UK, and the United States due to the Ukraine conflict, particularly affecting shipping operations. These restrictions have resulted in Russia offering substantial discounts on its oil, with India emerging as the main purchaser of Russian seaborne crude over the past three years.
Prior to the latest US sanctions, Rosneft held a significant position as an ESPO oil supplier.
Traditionally, Russian ESPO crude from Kozmino port predominantly served Chinese markets. However, Chinese demand has diminished after state refiners halted purchases following US sanctions, whilst independent refineries reached their import quota limits. Consequently, ESPO crude prices have reduced, creating favourable conditions for Indian purchasers.
Also Read | Trump sanctions impact on India’s Russian oil trade: Refiners stop placing new orders, await clarity; US crude imports at highest since 2022
According to a Reuters report quoting sources, IOC has bought five Russian crude oil shipments from non-sanctioned entities. The Donald Trump administration recently announced sanctions on two of Russia’s largest oil firms - Lukoil and Rosneft.
Even as Indian refiners are expected to adhere to the sanctions, they are also expected to continue procurement of Russian crude from non-sanctioned firms.
Russian oil continues to flow to India?
Indian Oil Corporation has procured approximately 3.5 million barrels of ESPO crude at prices comparable to Dubai quotes, scheduled for December delivery to an eastern Indian port, a trade source was quoted as saying.
Also Read | Trump sanctions: Short-term disruption guaranteed, but will India & China completely stop buying Russian oil? Why it’s highly unlikely
The company had previously withdrawn from seven to eight Russian oil cargo agreements following recent US sanctions announcements, as these supplies originated from sanctioned entities' subsidiaries, the report said.
In an analyst call following the earnings announcement, IOC Director (Finance) Anuj Jain affirmed the company's intention to continue Russian crude procurement whilst complying with sanctions.
"We are absolutely not going to discontinue (buying Russian crude) as long as we are complying with the sanctions. Russian crude is not sanctioned. It is the entities and the shipping lines which have got sanctions," he said according to TOI.
"If somebody comes to me with a non-sanctioned entity, and the (price) cap is being complied with, and the shipping is okay, then I will continue to buy it", Jain added.
According to the report, after US sanctions several Indian refiners have suspended their Russian oil purchases , including state-operated Mangalore Refinery and Petrochemicals Ltd, HPCL-Mittal Energy Ltd, and Reliance Industries , which operates the world's largest refining facility.
Also Read | Sign of oil trade disruption after Trump sanctions? Russian crude oil tanker headed for India takes a U-turn; now idling in Baltic Sea
Earlier this week, officials told TOI that while sanctions impact four Russian oil companies, Rosneft, India's main supplier handling approximately 45 per cent of Russian crude imports to India, operates as an aggregator instead of a direct producer, allowing non-sanctioned organisations to continue supply operations.
Russia faces extensive sanctions from the European Union, the UK, and the United States due to the Ukraine conflict, particularly affecting shipping operations. These restrictions have resulted in Russia offering substantial discounts on its oil, with India emerging as the main purchaser of Russian seaborne crude over the past three years.
Prior to the latest US sanctions, Rosneft held a significant position as an ESPO oil supplier.
Traditionally, Russian ESPO crude from Kozmino port predominantly served Chinese markets. However, Chinese demand has diminished after state refiners halted purchases following US sanctions, whilst independent refineries reached their import quota limits. Consequently, ESPO crude prices have reduced, creating favourable conditions for Indian purchasers.
Also Read | Trump sanctions impact on India’s Russian oil trade: Refiners stop placing new orders, await clarity; US crude imports at highest since 2022
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