India buys cheaper Russian oil amid OPEC+ cuts

August 07, 2023 (MLN): The average cost of Russian crude landing on Indian shores in June was the lowest since Moscow’s invasion of Ukraine more than a year ago, Bloomberg reported.

The price for each barrel including freight costs was $68.17, down from $70.17 in May and $100.48 a year earlier, according to the latest figures from India’s Ministry of Commerce and Industry.

While that is higher than a $60 cap imposed by Western nations on Moscow, the threshold does not include shipping.

India has become one of the world’s top consumers of cheaper Russian crude since the war, along with China.

Data from Kpler shows Indian imports dipping over the past two months, with flows expected to fall further in August as the OPEC+ producer fulfills a pledge to trim exports.

The analytics firm sees shipments to the South Asian nation rebounding from October, however.

India typically buys Russian crude on a delivered basis inclusive of freight, insurance, and other miscellaneous costs.

It leaves the seller to handle all logistics and risks with transporting the crude, regardless of whether the shipment is under or above the price cap.

Imports from Iraq in June averaged $67.10 a barrel, while those from Saudi Arabia were much higher at $81.78, according to the government data. India relies on imports to meet 88% of its oil demand needs.

India’s Oil Minister Hardeep Singh Puri told reporters in New Delhi on Friday that the discounts on Russian crude had narrowed, without elaborating.

Global benchmark prices have climbed over recent weeks after Russia and Saudi Arabia pledged supply curbs to prop up the market.

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