Indian Oil Corporation on Wednesday bought 3 million barrels of Russian Urals crude oil through a tender, Reuters quoted trade sources as saying.
Reuters reported the crude oil will be delivered by May. The Urals crude has been purchased from trader Vitol at a discounted price, the report said.
This is believed to be the second purchase of Russian oil by IOC in weeks. Earlier this month, IOC is reported to have bought around 3 million barrels of Urals crude for delivery in May at a discount of $20-25 per barrel.
Given the impact of Western sanctions, Russia has been offering oil and other commodities at discounted prices to India and other major buyers.
Last week, GlobalData, a leading data and analytics company, said given India's neutral stance on the Russia-Ukraine conflict, Moscow's offer of oil and other commodities at discounted prices will provide relief on the fiscal front.
“India's attempt to diversify its import sources will tend to reduce the financial burden on the government thereby reducing the risk of high import bill. Moreover, cheaper crude may bring down the current cost of production and help cool off inflationary pressures,” said Gargi Rao, economic research analyst at GlobalData. Previously, India rarely bought Russian oil due to the high freight costs.
Nayara Energy, which has a refinery in Gujarat, has also bought Urals oil, Reuters reported on Wednesday. Nayara Energy, which is part owned by Russia's Rosneft, bought about 1.8 million barrels of Urals, trade sources said. Nayara last bought Russian oil in March 2021.
Reuters reported Nayara's purchase involved “use of Liberia-flagged aframax Moskovsky Prospect, managed by a unit of Russia's state-run shipping firm Sovcomflot” to ferry the oil.
“Marshall Island-flagged Freud, managed by TMS Tanker Ltd and carrying about 1.14 million barrels of Urals, will reach Vadinar on March 30, while Moskovsky Prospect loaded with 725,380 barrels is expected to arrive on April 17,” Reuters reported. Hindustan Petroleum also bought Russian oil at deep discounts this month.
