Russian firms increased insurance cover for India's oil imports to 60% of all cargoes in July, significantly higher than 40% in December 2023 as the two nations continue cementing their energy ties, Reuters reported on Wednesday.
India has become the top buyer of Russian oil, with more than 60% of Russia's seaborne oil exports going to India. By using Russian insurers, Moscow is able to sell its oil above the $60 per barrel price cap the West imposed on Russian crude in a bid to limit Russia's oil revenue following its invasion of Ukraine. Western shipping and insurance services are only allowed for Russian cargoes sold at or below the price cap.
Last month, India became the world's biggest importer of Russian oil surpassing China,. Data on Indian shipments from trade and industry showed that the country imported 2.07 million barrels per day (bpd) of Russian crude in July, good for a 4.2% M/M and 12% Y/Y increase. That exceeds China's July oil imports of 1.76 million bpd via pipelines and shipments, based on Chinese customs data.
Indian refiners have been buying Russian crude at a discount to Brent ever since Western nations curtailed imports of Russian energy commodities following its invasion of Ukraine. India's purchase of Russian ESPO Blend crude jumped in July to 188,000 bpd as larger Suezmax vessels were used. Refiners in northeast China are typically the biggest ESPO buyers thanks to their close proximity to Russia; however, they are now buying less due to tepid fuel demand.
"India's requirement for Russian oil is going to go up as long as there are no further tightening of sanctions," an Indian refining source told Reuters.
India's oil Minister Hardeep Singh Puri has revealed that the country is prepared to keep buying oil from Russian companies that are allowed to make such sales, citing cheaper prices.
"If an entity is not under sanctions, there is no question I will buy from the cheapest supplier," he said
By Alex Kimani for Oilprice.com
Alex Kimani is a veteran finance writer, investor, engineer and researcher for Safehaven.com. More