This is how India puts up with oil and refined products
Russia is now India's second largest supplier of crude oil, and the country plans to increase exports of refined products (diesel, above all) to Europe and Africa, taking advantage of high prices. All the details
Indian refineries – including those of giant Reliance Industries, owned by tycoon Mukesh Ambani – are using Russian crude oil to boost diesel exports. The fuel then goes to countries that have imposed sanctions on Russian hydrocarbons, such as the European Union.
RUSSIA IS INDIA'S SECOND OIL SUPPLIER
In May, Russia became India's second largest crude oil supplier, overtaking Saudi Arabia and positioning itself after Iraq: this is a relevant fact, because before the invasion of Ukraine, India imported very little oil from Russia. about 2-3 per cent of the total, even though they buy almost everything they consume abroad. The turning point came precisely with the war, which made crude oil prices rise even more; Moscow, sanctioned, then began selling its Urals oil at a steep discount compared to Brent, the international benchmark .
According to Kpler's forecasts reported by the Financial Times , Russian crude oil exports to India will increase by more than 1 million barrels per day in June.
WHAT THE INDIAN REFINERIES WILL DO
As a result, Indian refineries could replace the volumes of diesel that Europe bought directly from Russia or refined from Russian crude. And they could record large profits from sales: on the one hand, because the sanctions on Russia have had the effect of making diesel prices rise significantly in Europe; and on the other, because Russian Urals crude oil sells for over 25 dollars a barrel less than Brent.
HOW EUROPE WILL (MAYBE) REACT
It will remain to be seen, however, whether European countries decide to buy Indian diesel, given its Russian origin, and whether the US will step up pressure on New Delhi to persuade it not to buy crude oil from Moscow.
Executives at Indian refining companies say they are responding to the international demand for diesel and other refined products, which is particularly strong in an energy crisis.
Ajay Sahai, chief executive of the Federation of Indian Export Organizations, said India has received many inquiries for importing diesel "from European countries". The two refiners that are buying the largest volumes of crude are Reliance and Nayara Energy (owned, in part, by the Russian state oil company Rosneft).
EUROPE REDUCES PURCHASES
Janiv Shah, an analyst at energy consultancy Rystad, explained that Reliance is worth 95 percent of Indian refined petroleum exports to Europe, and that the company will likely see its relevance increase as the diesel shortage in the Old continent "is here to stay".
In March, Indian diesel exports to Europe reached 230,000 barrels per day, but fell to 120,000 in April and 40,000 in May. Over the same period, India increased its sales to Africa.
IS IT POSSIBLE TO DISTINGUISH THE RUSSIAN CRUDE OIL?
Regarding the possible European ban on the import of Indian diesel, because it contains Russian crude oil, Shah actually explained that once the refineries process quality oil from various countries of the world, "therefore it is very difficult to establish that this single molecule of diesel comes from 'this' source in 'this' country. It is practically impossible to distinguish them ".
Reliance is capable of processing 1.2 million barrels of crude oil per day, with an extremely complex refining system. Nayara Energy did not comment on the purchases of Russian crude oil, recalling only that it complies with Indian rules and is committed to "meeting the growing energy needs of the nation".
THE ASIAN SUMMIT IN NEW DELHI
Meanwhile, on Thursday in New Delhi , the special summit of foreign ministers of India and the countries of Southeast Asia that are members of ASEAN (with the exception of Myanmar, led by a military junta that seized power with a coup state).
The Indian Foreign Minister, S. Jaishankar, said that the country "supports a strong, united and prosperous ASEAN, whose centrality in the Indo-Pacific is fully recognized": this is also the position of the United States.
The meeting discussed not only the impact of the war between Russia and Ukraine on energy and food security, but also the Asian repercussions of the rivalry between the United States and China.
In 2021, trade between India and ASEAN exceeded $ 78 billion. India mainly exports to the region chemicals and pharmaceuticals, minerals, boats, cotton, iron and steel; what you are most interested in is coal, palm oil, telephones and electronic circuits.
This is a machine translation from Italian language of a post published on Start Magazine at the URL https://www.startmag.it/energia/india-petrolio-russia-aumento-importazioni/ on Fri, 17 Jun 2022 09:44:47 +0000.