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    HomeLife StyleIndia Surpasses China as Top Buyer of Discounted Russian Oil 

    India Surpasses China as Top Buyer of Discounted Russian Oil 

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    India has emerged as the world’s biggest buyer of discounted Russian seaborne crude oil, surpassing China in April. This shift comes as India seeks cheaper alternatives following the re-imposition of US sanctions on Venezuela. 

     

    India’s imports of Russian oil jumped 12% to 1.85 million barrels per day (bpd) in April, a nine-month high. This surpasses China’s imports by 450,000 bpd, according to data from Vortexa. The surge in Indian purchases is attributed to discounted Russian oil prices compared to Middle Eastern grades and drying up of cheaper Venezuelan supplies due to renewed US sanctions. 

     

    Factors Behind the Shift: 

    • US Sanctions on Venezuela: Re-imposed sanctions on Venezuela limited India’s access to their cheapest crude oil source (Merey crude). 
    • Attractive Russian Prices: Urals crude oil from Russia offers a significant price advantage ($8-$10 per barrel) compared to sweeter crudes. This allows Indian refiners to stay below the $60 per barrel price cap imposed by G-7 nations. 

    Market Analysis: 

    Indian refiners are prioritizing cheaper, medium sour crudes like Urals (accounting for 77% of imports in April) to avoid US sanctions. Lighter, sweeter Russian crudes like Sokol and ESPO fall above the price cap and require non-Western shipping and insurance, making them less attractive. 

     

    Impact on Global Market: 

    India and China combined accounted for 62% of Russia’s crude oil exports (including Kazakh oil) in April. India’s increased reliance on Russian oil strengthens Russia’s economic standing despite Western sanctions. 

     

    The future of Venezuelan oil supplies to India remains uncertain. Relaxation of sanctions could see a shift back towards Venezuelan crude. India’s growing appetite for discounted Russian oil is likely to continue as long as price advantages remain significant. 

     

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