India Purchases 60 Million Barrels Of Russian Oil Amid Strait Of Hormuz Crisis

In the backdrop of the Middle East conflict disrupting supply chains, India has purchased nearly 60 million barrels of Russian crude oil for delivery next month, according to a Bloomberg report.

The oil purchases are aimed at deflating concerns over crude oil availability as shipping flows remain volatile. and far from normal levels in the Strait of Hormuz.

The cargoes booked at premiums ranging between $5 and $15 per barrel above Brent, indicating high demand for supply conditions and strong demand for accessible barrels.

The volume is in line with India's purchases for the ongoing month but represents more than double the quantity bought in February, as per data intelligence firm Kpler, citing the Bloomberg report.

Further, it noted that the buying activity was facilitated after the. 30-day-long US waiver to take delivery of Russian oil tankers that had already been loaded on vessels before March 5, helping reduce the impact of effective closure of the vital strait.

The waiver was later extended to shipments at sea before March 12 and further extended to other countries impacted by the supply chain disruptions.

Also Read: India Buys 1st Iran LPG Cargo In Years After US Eases Sanctions: Report

After Buying Diversification, Refiners Return To Russian Market

India-based refiners such as Hindustan Mittal Energy Ltd., and Mangalore Refinery & Petrochemicals Ltd. (MRPL) are back to purchasing Russian crude oil after reducing buying activities since December as a result of US induced pressure.

Meanwhile, the South Asian nation has also shifted towards supplies from Saudi Arabia and Iraq in recent months.

However, the larger chunk of these cargoes became stuck in the Persian Gulf following the outbreak of hostilities in the region.

The report also cited that people familiar with the matter as saying that officials in New Delhi expect the US waiver to remain in place as long as disruptions to shipping through Hormuz persist.

India Becomes A Key Buyer Of Discounted Russian Crude Oil

Russia is now benefiting from renewed demand and higher oil prices, with the Kremlin earning its highest revenues from crude exports since March 2022, shortly after the Ukraine conflict began.

As per ANI, a Russian oil-laden tanker, MT Aqua Titan, chartered by Mangalore Refinery and Petrochemicals Ltd., arrived in India on March 22 and is anchored in the Arabian Sea approximately 10 nautical miles off the Mangaluru coast.

In a move to further bolstering purchases from Russia, India-based refiners have also exploring alternative supply sources including Venezuelan oil as geopolitical uncertainty continues to affect energy markets.