- Stricter enforcement of sanctions on Russian crude oil have resulted in lower exports to India.
- The April volumes of U.S. crude flows to India are set to be the biggest since May 2023.
- The tougher enforcement of the G7 sanctions and related payment issues have been holding up Indian purchases of some cargoes of Russian crude oil.
India is set to import in April its highest oil volumes from the United States in 11 months as the stricter enforcement of the U.S. sanctions against Russia are slowing Russian crude flows to the world’s third-largest crude importer.
So far this month, three Indian refiners – state-held Bharat Petroleum and Indian Oil Corporation and private refining giant Reliance Industries – have already bought around 7 million barrels of U.S. crude for loading in April, unnamed traders have told Bloomberg.
The April volumes of U.S. crude flows to India are set to be the biggest since May 2023, per Kpler data cited by Bloomberg.
Most of the crude bought in March for April loadings is WTI Midland, which, although more expensive than some Middle Eastern crude, is comparable to Russia’s Sokol grade, whose flows to India have been the most affected by the tightened U.S. sanction enforcement.
The tougher enforcement of the G7 sanctions and related payment issues have been holding up Indian purchases of some cargoes of Russian crude oil, with tankers previously headed to India turning back eastwards, tanker-tracking data monitored by Bloomberg showed early this year. Related: The Gas Find That Could Transform Europe’s Energy Future
At the end of last year, the United States took a tougher stance on the sanctions against Russia and sanctioned several vessels for violating the G7 price cap of $60 per barrel, above which cargoes cannot use Western insurance and financing. Some of those tankers were already en route to India loaded with Russia’s Sokol grade and departed from the Far Eastern ports in Russia.
Now China has started buying up some stranded Sokol cargoes, while India has been looking elsewhere for its crude supply.
In February, India’s oil imports from the top crude exporter, Saudi Arabia, jumped to a four-month high amid lower Saudi selling prices for last month and the tightened sanctions on Russia’s crude flows.
By Charles Kennedy for Oilprice.com
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