India Has Started Talks With Saudi Arabia And The UAE On Replacing Russian Oil
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Middle Eastern miners guaranteed Indian supplies.
Refiners have begun talks with the Middle East's biggest producing countries to replace Russian crude hit by U.S. sanctions, which now accounts for about a third of the Indian market.
As Bloomberg reports, top executives from state-owned Indian refineries met representatives of Saudi Aramco and Abu Dhabi National Oil, the state-owned oil companies of Saudi Arabia and the UAE, which together produce more than 13 million bpd. The talks took place on the sidelines of an energy conference in Abu Dhabi last week, agency sources said. According to them, the Middle Eastern producers guaranteed the Indians supplies.
After the introduction of US sanctions, under which Rosneft and Lukoil fell, India's five largest refineries completely stopped purchases from Russia. Reliance Industries, Bharat Petroleum, Hindustan Petroleum, Mangalore Refinery and Petrochemicals and HPCL-Mittal Energy have not purchased a single batch for December - the month when the US sanctions will finally come into force.
Russian oil, according to Bloomberg, is now purchased only by state-owned Indian Oil and Rosneft-owned Nayara Energy. Moreover, the former has purchased crude from companies that have not fallen under sanctions, while the latter continues to work only on barrels of Russian origin.
To occupy the Russian niche on the Indian market, Saudi Arabia has sharply reduced prices for its grades with delivery in December. Arab Light, Arab Extra Light and Arab Super Light grades will be offered to customers in Asia at a discount of $1.2 per barrel, while prices for Arab Medium Arab Heavy crude will fall by $1.4 per barrel.
Saudi Arabia's price cuts are a clear invitation to Indian refineries to buy its crude to replace Russian barrels, an Indian oil industry source told The Economic Times earlier. Reliance Industries, formerly India's largest importer of crude from Russian Federation, has already increased its crude purchases from Saudi Arabia by 87% in October. Indian Oil has agreed to buy 24 million barrels from the United States and Latin America, while Hindustan Petroleum - 4 million barrels in the States and the Middle East.
As a result, Russian oil producers are accumulating unsold volumes: according to Bloomberg, at the beginning of November the volume of Russian oil at sea reached 382 million barrels and by 30 million barrels exceeds the levels of the end of August. In early November, two more tankers with Russian oil anchored near the Suez Canal and turned into "floating storage facilities," Reuters wrote, citing LSEG data.
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