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(Bloomberg) — Indian refiners have bought about 60 million barrels of Russian oil for delivery next month, according to people familiar with the matter, easing supply concerns as the Middle East war chokes flows.
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The cargoes were booked at premiums of $5 to $15 a barrel to Brent, said the people, who asked not to be named due to the sensitivity of the trade. The volume is similar to the amount of purchases for this month, but more than double than that for February, according to data intelligence firm Kpler.
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The buying spree followed a US waiver that allowed India to take Russian oil that was already loaded onto vessels before March 5 to offset shortages caused by the effective closure of the Strait of Hormuz. The measure was subsequently expanded to include other countries and updated to allow purchases of crude already at sea before March 12.
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The South Asian nation is heavily reliant on imported oil, and became a major buyer of discounted Russian crude following the invasion of Ukraine in early 2022. However, India sharply cut back purchases from late last year under US pressure, turning instead to barrels from Saudi Arabia and Iraq, much of which then became trapped inside the Persian Gulf after the outbreak of the war.
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Officials in New Delhi expect the US waiver to be extended as long as disruptions in Hormuz persist, the people said. Refiners such as Mangalore Refinery & Petrochemicals Ltd. and Hindustan Mittal Energy Ltd., which had avoided Russian oil since December, have returned to the market, they said.
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In addition to buying more Russian oil, Indian processors are also looking elsewhere to diversify their supply as the war drags on. The country’s purchases of Venezuelan crude for April arrival are projected at 8 million barrels, the highest since October 2020, according to Kpler.
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Russia, meanwhile, is reaping bumper profits on renewed demand and elevated prices for its oil. The Kremlin is earning the most from its crude exports since March 2022, shortly after Moscow’s troops poured into Ukraine.
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