India in talks to increase Russian oil imports

India is looking to double down on its Russian oil imports with state-owned refiners eager to take more heavily-discounted supplies from Rosneft PJSC, Bloomberg reported.

State processors are collectively working on finalizing and securing new six-month supply contracts for Russian crude to India, said people with knowledge of the companies’ procurement plans. Cargoes are being sought on a delivered basis from Rosneft, with the seller set to handle shipping and insurance matters, they said. 

These supply agreements, if concluded, will be separate and on top of shipments that India already buys from Russia via other deals. Details on volumes and pricing are still being negotiated with Indian banks set to fully finance all cargoes, said the people who asked not to be identified as discussions are confidential. Indian refiners will increasingly procuring directly from Russian companies such as Rosneft as top international traders such as Glencore Plc wind up their dealings, they added.

State refiners include Indian Oil Corp, Hindustan Petroleum and Bharat Petroleum, while private processors are Reliance Industries and Nayara Energy, which is partly owned by Rosneft. Procurement activities for state and private companies are done independently. Spokespeople at the three largest state-owned companies couldn’t immediately comment when contacted on the matter.

Both state and privately-owned refineries in India have been ramping up purchases of Russian crude as sanctions and trade restrictions rolled out by the US, UK and European Union have caused most buyers to flee and offer levels to crash. An unprecedented amount of Russian crude was heading to India and China last month as European buyers scrambled for replacements and reached as far as United Arab Emirates for alternatives. The ensuing panic and rerouting of global oil flows have lifted oil by more 20% since late-February.

Refiners in Asia’s second-largest oil consumer have been enjoying elevated profits from turning cheap crude into fuels that’s sold domestically and also in the export market to customers in Europe and the US. Russian crude forms just part of India’s overall basket of crude oil feedstock, alongside other long-term as well as spot purchases from the Middle East and Africa.