© Reuters. An Indian refinery in Mumbai (Reuters Photo).
NEW (NYSE:) DELHI (Reuters) – India’s imports of Russian oil are likely to decline due to less discounting and payment issues, a senior government official told reporters Monday, forcing refiners (TADAWUL:) to seek to increase its oil imports from other sources.
Russia has become the largest supplier of oil to India after Western countries refrained from buying crude from Moscow due to its invasion of Ukraine in February 2022. Indian refineries rely heavily on Russian oil due to the large reductions in record prices for crude.
But a source at an Indian refinery said discounts for Russian Urals crude had fallen to between 3 and 3.5 a barrel for August loading and September delivery, while Russian oil in spot markets was lower than before.
The discount ranged between eight and nine dollars a barrel in July.
The government official, who asked not to be named, said that because of the reduced discount, Russian oil is often priced above $60 a barrel, the ceiling imposed by Western countries.
Russia reduced the opponent due to the decision of the OPEC + alliance to cut production.
“The switch to Russian oil was because of the discount. How can you pay if the price is above the ceiling of $60 a barrel?” the official said.
“The problem is not that companies are unwilling to buy. It’s about their ability to buy and their willingness to buy. Your ability to buy ends if you can’t pay,” he added.
Indian refineries are already facing problems making payments for the Russian shipments due to Western sanctions imposed on Moscow.
The official said that Iraq is ready to increase its oil supplies to India with better discounts, noting that his country is in talks with Baghdad to extend the credit period to 90 days instead of 60.
Iraq fell to second place since Indian refineries raised their imports of Russian oil last year.
Another source working in the field of refining said that the company he works for will not buy Russian oil if its price exceeds $60 a barrel.
(Prepared by Mohamed Attia for the Arabic Bulletin – Edited by Ali Khafaji)
2023-07-17 20:38:00
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