Business: After the US imposed sanctions on Russia’s two big oil producers Rosneft and Lukoil, India can now increase the purchase of crude oil from West Asia, America, Latin America, Canada, Brazil etc. in exchange of Russia. However, the cost of transportation from here will increase which will increase the import bill. Currently, India imports 17 lakh barrels of crude oil from Russia every day and central government sources say that the same situation may continue till November 21, the date of implementation of the US sanctions. But after this it will start decreasing.
India’s government and private refineries currently buy about 1.2 million barrels of oil per day from Rosneft and Lukoil. Most of this volume comes from private refineries, Reliance Industries Limited and Nayara Energy.
After the implementation of the sanctions, this purchase will have to be stopped because the companies making direct or indirect purchases with these Russian companies will also come under the purview of the US sanctions. Kpler’s principal research analyst (refining and modeling) Sumit Ritolia said that till November 21, the flow of Russian crude oil may remain at 16 to 18 lakh barrels per day. But after this, there will be a visible decline in the volumes of oil coming from Rosneft and Lukoil, as Indian refiners will want to avoid any risk of US sanctions. agency
Companies will have less options
Reliance Petrochemicals, which has a 25-year contract with Rosneft to buy 5 lakh barrels per day of crude oil, could be the first company to exit the contract, sources said. Similarly, the Naira, which is completely dependent on Russian oil, will have little choice after supplies from elsewhere are reduced due to EU sanctions. Still, refiners will continue to obtain unrestricted Russian oil through third-party intermediaries, though out of an abundance of caution, Ritolia said.
The biggest challenge before Reliance
Reliance Industries Ltd. (RIL), the largest importer of Russian oil, is facing the most immediate challenges, Ritolia reported. With its contracts with Rosneft affected, RIL will have to turn to immediate procurement from third parties to ensure compliance with OFAC regulations while maintaining operational continuity. It will have to rebuild its supply and financial chains.
Reliance said- will follow every instruction of the government
Reliance Industries Ltd. Said, we have seen the sanctions imposed by the EU, UK and US on Russian crude oil purchases and exports of finished products to Europe. Reliance is currently assessing the impact, including new compliance requirements. We will follow EU guidelines regarding export of finished products to Europe. As always, whenever we receive any instructions from the Government of India in this regard, we will follow them completely.
America again said – India is keeping distance from Russian oil
Washington. America again claimed that India has started reducing its oil purchases from Russia on the request of President Donald Trump. White House Press Secretary Carolyn Levitt said, if you look and read the sanctions imposed on Russia, they are very stringent. I saw some international news which showed that China is reducing oil purchases from Russia. We know that India has also done the same on the request of President Trump.
Washington has also urged its European allies to cut Russian oil imports, Levitt said. The US President and his administration are claiming that India has given assurances to reduce oil purchases from Russia whereas India has been saying that its energy policy is dictated by its own national interests, especially ensuring affordable and secure supply to its consumers.
