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The discounts on Russian Urals crude oil supplied to India have narrowed to US$1-2 per barrel this week compared to the benchmark Brent crude, amidst concerns regarding oil supplies from the Middle East, Reuters reports.
Reportedly, the sharp reduction in the discount signifies a considerable shift in the market dynamics compared to early July, when Urals cargoes were sold in India at over a $10 per barrel discount due to a surplus of Middle Eastern oil and weak demand from China.
China and India continue to be the primary purchasers of Russian oil, with exports redirected from Europe to Asian markets following the imposition of Western sanctions in response to Russia’s war in Ukraine.
According to sources, Indian refineries have ramped up their procurement of Russian crude due to fresh apprehensions about the reliability of Middle Eastern supplies, following renewed US military actions against Iran and further disruptions to tanker traffic through the Strait of Hormuz.
“Indian refineries are purchasing significant volumes of Russian oil this year, as it has proven to be a stable feedstock,” notes one of the sources.
Concurrently, the source emphasized that prices remain quite volatile due to geopolitical tensions affecting global markets.
This week, Chinese refineries also increased their purchases of Russian oil amidst supply disruptions from the Middle East. According to trade data and market participant information, crude oil imports into India from Russia and Latin America surged in the second quarter, while imports from the Middle East declined due to supply constraints via the Strait of Hormuz.
Russian oil continues to constitute a substantial portion of India’s oil imports, supported by competitive pricing and steady deliveries despite occasional market fluctuations and logistical challenges.
Джерело новини: interfax.com.ua