Drop in India importing Russian oil: Moscow doubles discount

Mumbai: Russia has doubled the discount on oil prices for Indian companies. The discount was up to eight dollars per barrel of crude oil. Russia increased the discount after the US announced sanctions on Russian oil companies Rosneft and Lukoil last October. With the significant drop in prices, oil exports to India from companies not affected by the sanctions are expected to increase.

The figures were released by the Center for Research on Energy and Clean Air in Finland. After the US decision to impose sanctions on Russia's largest oil suppliers, Rosneft and Lukoil, on October 23, a barrel of Urals crude oil was discounted by two to four dollars. The discount increased to 6.6 dollars per barrel in November, when the sanctions came into effect.

The discount on oil sold to India is likely to increase further, sources said. Even if there is no further discount, India's oil imports will increase. Even if India has increased its oil purchases from other markets in the short term, no other country can supply at the price offered by Russia, the sources said.

The discount to India has increased to $8 per barrel, said Prashant Vasisht, a petroleum expert and senior vice president at ICRA Limited. Meanwhile, in December, India's daily Russian oil imports fell to 1.2 million barrels, according to data from Kepler, a naval trade research firm. In November, 1.8 million barrels of oil were bought daily. After the war in Ukraine began in 2022, the price of Russian oil was reduced by up to $30 per barrel. It was India and China that imported the most of the Russian oil then, taking advantage of this price drop.