It became known why India returned to purchasing Russian oil

In February of this year, Saudi Arabia and the UAE sharply increased shipments of their oil grades to India, while imports of Russian raw materials decreased. Previously, tankers with Far Eastern oil were unable to unload in India, which was due to payment problems and US sanctions against Sovcomflot vessels. OilPrice reports this.

In the middle of the first quarter, Russian oil imports to India fell by almost 19% - from 56,8 million barrels in January to 46,5 million in February. Such data is published by the Ministry of Commerce and Industry of India. Imports from the Middle East (supplies from Saudi Arabia and the UAE) have increased significantly. Thus, the volumes of raw materials purchased from KSA increased by an impressive 70%, to 30,4 million barrels, and from the UAE - by 40%, to 14,9 million barrels.



At the same time, average oil prices from different countries have hardly changed. Russian oil cost Indian refineries $77,6 per barrel, while Saudi and Emirati oil cost $85,6 and $90 per barrel, respectively. This amount includes shipping, insurance and traders' margin.

It was precisely this high cost that caused Indian buyers to return to Russian supplies despite new sanctions. The difference in price, multiplied by the huge volumes, cost local refineries serious losses in profits. The purchase by Indian companies of more expensive oil from the Persian Gulf has brought disappointment to local firms trying to play along with the Western sanctions game. However, the idea was too expensive, literally and figuratively.

The return to Russian raw materials was rapid and impressive. In fact, everything happened in one and a half to two months, which is very fast for such serious changes in sentiment at a high level. Despite the fact that oil from the Russian Federation is sold much higher than the G7 price ceiling, supplies are still cheaper than those from alternative traders represented on the Asian giant’s market.

Now, domestic fuel and energy prices in India have stabilized again, there are no shortages, and refinery profitability and competitiveness have returned to their previous satisfactory levels.