India fears US sanctions and will only buy Russian oil below $60
Indian refiners fear the latest U.S. sanctions on Russia could further impact their ability to import cheap Russian crude as freight rates are set to rise and eat into refining margins, sources told Reuters of the sector .
The United States imposed new sanctions against Russia last week, marking the second anniversary of Russia's invasion of Ukraine and in response to the death of opposition politician and anti-corruption activist Alexey Navalny.
Among the 500 targets of the new sanctions, the US Treasury and State have targeted Russian oil operator Sovcomflot and more than a dozen oil tankers linked to the Russian state company.
Indian refiners fear the new sanctions could make it more difficult to ship oil from Russia on vessels not subject to sanctions, resulting in higher shipping costs and a reduction in refining margins, Reuters sources said.
For this reason, India will continue to buy crude oil from Russia, but only if it is sold below the G7 maximum price of $60 a barrel and if it is shipped on vessels not subject to sanctions, an Indian government source told Reuters.
Even before the latest US sanctions , refining margins at India's major state refineries had fallen due to increased difficulty accessing Russian crude and a surge in freight rates due to disruption of shipments from the Red Sea, analysts and traders said. to Bloomberg last week.
For most of 2023, Indian refiners have enjoyed high refining margins and profits thanks to the import of cheap Russian crude at $20 a barrel and above by international benchmarks.
The decline in refining margins is due to rising costs for Indian refineries due to increased competition for Russian supplies in Asia, rising transportation costs and tightening US sanctions, which have limited access of India to Russian crude at very low prices.
Tightening G7 sanctions and related payment problems have curbed Indian purchases of some cargoes of Russian crude, with tankers previously bound for India turning back east, monitored tanker tracking data showed from Bloomberg earlier this year.
Thanks to our Telegram channel you can stay updated on the publication of new Economic Scenarios articles.
The article India fears US sanctions and will only buy Russian oil under $60 comes from Economic Scenarios .
This is a machine translation of a post published on Scenari Economici at the URL https://scenarieconomici.it/lindia-teme-le-sanzioni-usa-e-acquistera-petrolio-russo-solo-sotto-i-60-dollari/ on Wed, 28 Feb 2024 16:30:45 +0000.