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3 Jan, 2024 11:39

Russian crude unable to reach India amid sanctions – Bloomberg

China has reportedly snapped up the undeliverable cargoes
Russian crude unable to reach India amid sanctions – Bloomberg

Several ships loaded with Russian crude oil ordered by India have been unable to deliver their cargo and are now heading away from their intended destination, Bloomberg reported on Tuesday, citing vessel-tracking data.

The deliveries to India have reportedly been hampered by payment issues stemming from Western sanctions. The US treasury pledged last month to ramp up the enforcement of the $60-a-barrel price cap on Russian crude exports, which came into effect in 2022.

The five tankers, which are carrying one of the Russian crude grades, Sokol, had been idling off India for days, and are now moving eastwards towards the Malacca Strait, Bloomberg wrote.

“China seems to have stepped in to save the idling Sokol cargoes,” Viktor Katona, lead crude analyst at data intelligence provider Kpler, is quoted by the outlet as saying.

A sixth tanker, the NS Century, which is sanctioned by the US, has been idling off Sri Lanka, Bloomberg added citing the tracking data.

India has emerged as a major buyer of Russian crude since Moscow redirected its cargoes from Europe eastwards following Ukraine-related sanctions. However, December saw New Delhi’s crude oil imports from Russia plunge to their lowest level since January 2023, with Bloomberg attributing the drop to payment issues.

According to India’s oil minister, imports fell due to unattractive pricing and not because of payment problems. Speaking at a press conference on Wednesday, Hardeep Singh Puri said he had not received any complaints so far from oil companies about payment issues. He did not elaborate on new suppliers that are offering better prices.

Indian refiners pay for Russian oil upon delivery because Western sanctions pose challenges in arranging vessels, insurance, and payments. According to Reuters, the supplier of the cargoes, a unit of the state oil company Rosneft, has been unable to open an account with a bank in the UAE to accept payments in dirham. Indian state refiners have mainly settled oil trade with Russia in United Arab Emirates dirhams, along with the Chinese yuan and the Indian rupee.

India’s oil ministry said last month that the country’s refiners are abiding by the $60-per-barrel price cap imposed by the US and its allies on Russian oil.

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