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The price of ESPO crude has fallen, making it attractive to Indian buyers. Indian Oil Corp. purchased five cargoes of Russian oil from companies not subject to sanctions, with deliveries scheduled for December, Reuters reports. Traders note that purchases have resumed despite U.S. calls to stop buying Russian oil.
Following sanctions on major Russian oil companies Rosneft and Lukoil, many Indian refineries, including state-owned Mangalore Refinery and Petrochemicals Ltd, HPCL-Mittal Energy Ltd, and Reliance Industries, halted purchases of Russian crude. However, Indian Oil Corp.’s CFO Anuj Jain said the company will continue buying Russian oil if prices per barrel meet sanction-compliant levels. According to one trade source, Indian Oil purchased about 3.5 million barrels of Siberian ESPO crude, priced roughly at Dubai benchmark levels, with delivery planned to India’s eastern port in December. Sellers were not disclosed.
Two sources added that the refinery had previously refused seven to eight cargoes of Russian oil after the latest U.S. sanctions because deliveries came from subsidiaries under restrictions.
Most ESPO crude from the Kozmino port typically goes to China, but demand has declined after state refineries paused purchases due to U.S. sanctions, while independent Chinese refiners used up their import quotas. This caused ESPO prices to drop, attracting Indian buyers.
Recently, a White House official said that following talks with the U.S., India is reducing its Russian oil imports by 50%. On October 29, Bloomberg reported that a tanker loaded with Russian oil bound for India had turned around and was drifting in the Baltic Sea, signaling potential disruptions in oil trade. Indian Oil Corp. also plans to buy up to 24 million barrels of oil from North and South American suppliers in the first quarter of next year, preparing for reduced Russian supply following the latest U.S. sanctions.
