As India moves to tap new sources to hedge against geopolitical risks, the country’s state refiners are close to signing their first annual deals to buy Russian oil.
India ships in over 80 percent of its oil needs. For the majority of its supply, it relies on the Middle East. However, India’s imports from the Middle East plunged to a 4-year low in 2019.
Compared with the shipping costs for Middle Eastern grades, transportation costs for Russian oil tend to be higher. Thus, India’s buying oil from Russia had typically been low. However, state-owned refiners in India are now moving towards signing deals for Russian oil.
As much as 40,000 bpd of Russian crude from Rosneft will be bought by IOC. The amount is around 2.5 percent of its total refining capacity.
