India cuts back on US oil purchases and turns to Russia
According to the latest reports , India reduced imports of crude oil from the United States by one million metric tons in the second quarter, while significantly increasing imports of Russian oil which is sold at discount prices.
India's energy mix now looks dramatically different than it did a year ago. Last year, Russian oil in the Indian crude basket was a paltry 2.2%, while the US was 9.2%; currently, Russia accounts for nearly 12.9% of India's crude oil imports, while the US share has dropped to just 5.4%.
India has never been a big buyer of Russian crude, despite having to import 80% of its needs. In a typical year, India imports only 2-5% of its crude oil from Russia, roughly the same percentage that the US had before announcing a 100% ban on Russian energy commodities. In fact, India imported only 12 million barrels of Russian crude oil in 2021, while most of the oil comes from Iraq, Saudi Arabia, the United Arab Emirates and Nigeria.
In May, however, news emerged of a "significant increase" in Russian oil supplies destined for India. According to a Bloomberg report, India spent a whopping $ 5.1 billion on Russian oil, gas and coal in the first three months after the invasion, more than five times the value of a year ago. However, China remains the largest buyer of Russian energy commodities, spending $ 18.9 billion in the three months to the end of May, almost double the previous year.
At the base of the choice there is no reason of a political nature, but a strict economic choice. According to the International Energy Agency (IEA), Urals crude from Russia has been offered at record discounts. Ellen Wald, president of Transversal Consulting, told CNBC that a couple of commodity trading firms, such as Glencore and Vitol, have offered discounts of $ 30 and $ 25 per barrel respectively for the Urals blend. Urals is the main blend exported from Russia. This is a 30% search discount, and no political pressure from the White House can counteract such a situation.
However, India has very good relations with Russia, so the change of oil supplier was not diplomatically problematic.
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The article India reduces US oil purchases and turns to Russia comes from ScenariEconomici.it .
This is a machine translation of a post published on Scenari Economici at the URL https://scenarieconomici.it/lindia-riduce-gli-acquisti-di-petrolio-usa-e-si-rivolge-alla-russia/ on Thu, 25 Aug 2022 09:00:17 +0000.