State refiners Indian Oil Corp. and Bharat Petroleum Corp. have signed contracts to take deliveries of Russian crude in January, using a price discount and large parcels from sellers not subject to Western sanctions.
Delivery terms
The agreements envisage an unspecified volume of supplies at a discount of about $5 a barrel; in the previous period the discount was about $3 a barrel.
Estimates indicate that India's total imports from Russia are unlikely to exceed a third of the pace seen for most of the year, that is roughly 600,000 barrels per day or less. Supplies to Nayara Energy Ltd., partly owned by Rosneft, typically make up more than half of that volume.
Financial and corporate implications
After accounting for the discount and transportation costs, Russia's actual revenue from such sales is estimated at roughly $40–45 a barrel; payments for deliveries are made in UAE dirhams and US dollars.
At the same time some Indian refineries are avoiding Russian crude: among them Mangalore Refinery and Petrochemicals Ltd. and HPCL-Mittal Energy Ltd. Private company Reliance Industries announced at the end of November that it had stopped processing Russian oil at part of its Jamnagar refinery.
