State-run refiner buying Russian crude with govt blessing | India News



NEW DELHI: State-run refiners have the government’s blessing to buy Russian crude from the market without violating sanctions clause, which explains the spate of tenders floated by nearly all of them at a time when trading houses are finding it difficult to find buyers.
Led by the largest state-run refiner IndianOil, Hindustan Petroleum and MRPL, the refining subsidiary of exploration giant ONGC, among them are lifting six million barrels of Russia’s Urals grade from European trading houses. Reports have suggested Bharat Petroleum will also queue up soon.
India imports 85% of its oil but Russia has never been a major source for refiners, largely due to high cost of shipping that involves transhipments. Russian crude accounted for a meagre 2% of India’s oil imports between April 2021 and January this year.
There is then something more than demand that is driving these tenders. “There is no way that almost all major government refiners would have floated tenders for Russian crude without sounding out the government in the current situation,” a person in the know said.
TOI had on March 15 reported India agreeing to buying Russian oil. With good reason. Russian energy exports, per se, are not sanctioned. Europe continues to buy them. Reluctance of banks in handling payments and issues with shipping insurance are turning away many buyers.
Besides, the government is not involved in the dealings, the companies are. The deals are with global trading houses, who are taking care of shipping and insurance. So payments can be made through usual channels, doing away with the need for Rupee-Rouble trading. The US has already said these oil purchases do not violate the sanctions.
Allowing crude to flow in from Russia, where state-run energy companies have invested $15 billion, thus, signals New Delhi leaving its options open on energy security and also satisfy Moscow by keeping trade going.
There were several indications of the deal. “I myself have had a conversation with the appropriate levels of the Russian Federation. There are discussions (on buying oil) currently underway,” oil minister Hardeep Puri had last week told Parliament, adding issues such as availability, payment and insurance were being looked into.
Next came Russian deputy prime minster Alexander Novak’s “detailed” discussion Puri on deepening bilateral energy ties. “Russia’s oil and petroleum product exports to India have approached $1 billion and there are clear opportunities to increase this figure,” a Russian readout of the meeting had said.


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