Indian Refiners Becoming Wary Of Buying Russian Oil As EU Sanctions Loom - Report

Highlights
Indian refiners are wary of buying Russia crude oil loading after Dec. 5 when European Union sanctions take effect, pending clarity on the proposed G7 price cap mechanism, according to sources familiar with the refiners' crude purchase plans.
Chinese refiners have already begun slowing down Russian oil imports from next month.
The Asian giants, who are two of the world's top three importers, had become Russia's biggest customers after the West shunned Russian oil after the outbreak of war in Ukraine.
Reduced buying by both of them would leave Russia chasing alternative customers, potentially depressing prices even if those new buyers are unlikely to join a plan by rich nations in the Group of Seven (G7) to cap Russian oil prices.
Reliance Industries Ltd, operator of the world's biggest refining complex and a major customer for Russia, has not placed orders yet for Russian cargoes loading after Dec. 5, two sources familiar the refiner's purchase plans told Reuters.
Neither has state-run Bharat Petroleum Corp, they said.
The Indian companies did not respond to Reuters email seeking comments.
According to the sources, Reliance is cautious about reactions from foreign banks given its exposure to the western financial system and overseas sales of refined products.
"There are too many uncertainties attached to the cap mechanism. We don't know what the payment mechanism could be and what could be the cap level," said a source at one of the state refiners.
Still, Indian Oil Corp, the country's top refiner, has placed orders for Russian cargoes, including for loading some parcels beyond Dec. 5, under term and spot deals, said one of the sources.
"IOC wants to secure barrels," the source said, adding that Indian refiners have the option of raising purchases under their term deals with the suppliers, mainly in the Middle East, to meet their contractual commitments if they face problems in getting Russian supplies. IOC did not respond to Reuters email requesting comment.
In contrast, private refiner Nayara Energy, majority owned by Russian entities, plans to continue Russian oil imports, sources aware of its crude purchases said.
After western sanctions were imposed on Russia and Rosneft, which owns about 49% of Nayara, most foreign banks stopped dealing with Nayara, leaving the refiner dealing through Indian banks.
PAYMENT, INSURANCE
While refiners are cautious about sanctions, India and Russia have set up alternatives to western insurance, finance and maritime services in order to conduct their trade.
Indian refiners buy Russian oil on a delivered basis with insurance - cargo, P&I and hull and machinery - arranged by Russian entities. India accepts Russian insurance.
Also, India has recently devised a mechanism to settle trade with foreign nations in rupee terms through vostro accounts of foreign banks in India. A commerce ministry official on Tuesday said Russia's Gazprombank had opened a vostro account with UCO Bank, and VTB Bank and SberBank have opened accounts with their own India-based branch offices. India's central bank in July this year introduced a new mechanism for international trade settlements in rupees.
Great Deals on Used Cars
View All Used Cars
- 57,276 km
- Petrol
- Manual

- 62,504 km
- Petrol
- Manual

- 25,354 km
- Petrol
- Manual

- 30,571 km
- Petrol
- AMT

- 54,918 km
- Petrol
- Manual

- 70,457 km
- Petrol
- Manual

- 17,000 km
- Petrol
- Manual

- 55,496 km
- Petrol
- AMT

- 39,692 km
- Petrol
- AMT

- 44,112 km
- Diesel
- Automatic
Upcoming Cars










Upcoming Bikes










Explore More
Latest News
Related Articles

2 hours ago
The new video shows the subcompact SUV’s redesigned tail section and confirms that it will get ADAS functions

3 hours ago
The Mercedes-AMG CLE 53 4MATIC+ Coupe has an upgraded 3.0-litre inline six-cylinder turbo engine producing 442 bhp and 560 Nm torque.

5 hours ago
The Swift will be powered by a 1.2 litre, 3-cylinder petrol engine that puts out 81 bhp and 108 Nm of torque

5 hours ago
The Revuelto is powered by a 6.5 litre V12 engine mated to three electric motors that churn out a combined 1001 bhp

6 hours ago
Kia India takes the wraps off its new EV charging initiative, the K-Charge. It will be available to non-Kia EV owners as well.

6 hours ago
Milestone was reached about 7 years after the plant commenced operations in February 2017.

7 hours ago
Hero MotoCorp and Ather Energy come together to form a partnership for an inter-operable fast-charging network in India.

8 hours ago
Kawasaki is offering discount vouchers on the Vulcan S, Ninja 400, Ninja 650 and Versys 650 in its lineup with benefits going up to Rs. 60,000

8 hours ago
India-spec compact SUV to get a different design from the model sold in global markets.

-1217467 second ago
Replying to customer concerns about S-Presso's safety standard, post the Global NCAP crash results, Suzuki Auto South Africa's official handles have commented on social media saying that the model sold there are safer than the ones sold in India.

-959827 second ago
Mahindra has finally announced the name of its highly-anticipated S201 and we now know that it is called the XUV300. The XUV300 will be launched in February 2019. The SUV will be based on the SsangYong Tivoli and is Mahindra's third SUV in the subcompact segment after the Nuvosport and the TUV300. The company targets a whole new set of audience with the introduction of this one and hence there's a lot of effort gone into the design as also adding comfort to the consumers.

1 day ago
The price hike is in relation to increased commodity prices and the rising costs attributed to inflation

1 day ago
Japanese Luxury carmaker Lexus has launched the new generation of its flagship SUV, the LX in the Indian market. The car has arrived with a new design, many more features and just a Diesel engine option. But is it worth Rs. 3 crore? We take it out for a drive
