NEW DELHI, Sept 19 (Askume) – Indian refineries are in joint talks to buy Russian oil next year, with most suppliers eyeing crude above $60 a barrel, a government source said on Thursday.
Russia is India’s biggest oil supplier, the world’s third-largest oil importer and consumer, and Moscow’s biggest offshore oil customer.
This year, India’s private refineries have struck annual deals with Russian oil supplies, while state-owned refineries are buying oil from the spot market.
India is also heavily dependent on Middle Eastern producers, with its refineries having annual oil import agreements with major Middle Eastern oil producers. Discussions with Middle Eastern suppliers on agreements for next year’s term will begin in December, sources said.
Asked whether Indian companies would seek better import deals from oil producers, sources said agencies have revised their estimates of global oil demand.
“The conversation will be different from last year… you can draw your conclusions in countries where demand is growing and in a world where demand is declining.”
Oil Minister Hardeep Singh Puri on Wednesday said India will continue to buy Russian oil from unsanctioned entities as prices are cheaper .
Askume reported on Wednesday that Russian insurers were promotingIndia, its top buyer, plays a growing role in oil supply.
Through Russian insurance companies, Moscow can sell oil at prices above $60 a barrel. Sanctions were imposed by the G7, the European Union and Australia to curb Russia’s oil revenues after the invasion of Ukraine.
“Sometimes, even if the price is at the limit or close to the limit, sellers are not willing to take the risk and use Russian insurance… If the goods are priced below $60,” it can be covered by Russian insurance, the source said.
Indian refiners use UAE dirhams and US dollars to buy Russian oil. “Russian oil priced below $60 is paid for in dollars,” he said. He added that Indian refiners have also used rupees and yuan to settle some payments in the past.
