Govt owned refiners increase Russian oil imports despite G7 price cap

The Indian imports from Russia increased due to a lower demand from China leaving more oil to be supplied to the Indian markets, an industry expert said

State-operated oil companies increased their oil imports from Russia in September, indicating that the G7 price cap did not hinder oil imports, according to The Economic Times (ET). Indian state-owned refiners imported 1.57 million barrels per day (mbd) in September, up from 1.44 mbd in August. This led to an increase in Russia's share of Indian crude imports to 38 per cent, up from 33 per cent a month earlier, the newspaper cited data from Vortexa, an energy cargo tracker.

Significantly, the European Union, G7 countries, and Australia had imposed a price cap of $60 per barrel on the supply of Russian crude to limit Russia's ability to finance its conflict against Ukraine.

Nevertheless, September imports were lower than July imports from Russia, when India ordered 1.9 mbd, accounting for a 42 per cent share in Indian imports, the report cited Serena Huang of Vortexa as saying. Indian imports from Russia increased due to lower demand from China, which left more oil available for the Indian market, an analyst at Vortexa noted. A decline in Saudi exports to India also led to higher demand for crude oil from Russia.

As it stands, China is the largest buyer of Russian crude oil. The volume of oil China received by ship from Russia declined 13 per cent to 1.2 mbd in September, compared to the previous month. Europe, conversely, imported 40 per cent more Russian oil in September, at 0.4 mbd, the ET report stated.

All Russian crude grades, including the flagship Urals, are currently trading at more than $80 per barrel, significantly above the G7 price cap of $60 per barrel. In addition to this, G7 sanctions prohibit the use of Western shipping, finance, and insurance for Russian oil sold above the cap. "The price cap has not significantly affected India's imports of Russian crude, possibly because vessel owners carrying Russian crude sold above the price cap may have alternative insurance," Huang added.

Conversely, private-sector refiners importing Russian crude experienced a sequential decline of 13 per cent in September to 0.5 mbd. However, private sector imports of refined products from Russia increased by 23 per cent to reach 172,000 barrels per day, the ET report mentioned.