India actively buys US oil after turning its back on Russia

Russian crude flows to India surged as the Russia-Ukraine conflict broke out. The Organization of the Petroleum Exporting Countries and its allies (OPEC+) remain India’s biggest suppliers, but tighter US sanctions have choked off the flow.

Traders said Bharat Petroleum Corp, Indian Oil Corp and refiner Reliance Industries bought about 7 million barrels of US crude for April delivery.

Most of the crude the US bought this month was West Texas Intermediate Midland crude, which is more expensive to ship than barrels from the Middle East, traders said.

“Given the problems faced in importing Russian oil, it is no surprise that Indian refiners are turning to US oil as a suitable alternative,” Dylan Sim, an analyst at industry consultancy FGE, told Bloomberg .

US crude accounted for 10% of India's imports in 2021 but has fallen to as low as 4% in the past two years as Russia expanded its market share, according to Mr. Sim.

Crude oil tanker in Nakhodka Bay, Russia (Photo: Reuters).

Other Russian crudes have also been affected by tighter sanctions enforcement. Russian tankers have been idle off the coast of India for weeks now.

Throughout 2023, Russia's share of the Indian market averaged 39%. According to Statista, Russia is the world's third-largest oil producer, accounting for more than 12% of global crude oil production. The energy sector is considered an important lifeline for the Russian economy.

The G7, EU and Australia also imposed price caps prohibiting insurance companies from financing and transporting Russian seaborne oil exports above $60 a barrel.

In October 2022, OPEC+ agreed to cut production by 2 million barrels per day (equivalent to 2% of global supply) until the end of 2023. The group later agreed to extend the curbs until the end of 2024, in an effort to balance the market.

Source: https://dantri.com.vn/kinh-doanh/an-do-tich-cuc-mua-dau-cua-my-sau-khi-quay-lung-voi-nga-20240319220841222.htm