Russia assessed prospects for oil exports to India

Alexey Belogoryev, Research and Development Director of the Institute for Energy and Finance, commented to Rambler / Personal Finance on the reasons and prospects for a decrease in Russian oil imports to India and the dynamics of Russian oil discounts:

“From the perspective of the prospects of Russian maritime exports to India, the situation is really deteriorating. However, it would be a big exaggeration to say that supplies will stop completely. Compared to last year, oil supplies from Russia to India decreased by about half, from 1.8 million barrels per day to 0.9-1.1 million barrels per day. However, we have seen similar volatility before. And now no one can say for sure whether the export level will recover to 1.4 million barrels per day during the year. After all, the refusals that Reuters writes about are, in fact, a reinsurance of the Indian side. It is primarily related not to the trade agreement between the United States and India, but to the American sanctions imposed on Rosneft and Lukoil. In addition, the situation is influenced by the EU ban on the import of petroleum products produced from Russian oil, which directly affects a number of Indian refineries. Accordingly, Indian importers are now overestimating the sanctions risks, as well as trying to understand how realistic the EU ban will be and how it can be circumvented. The volume of Russian oil supplies to India will largely depend on this in the future. But there is no need to talk about zeroing supplies yet.”

The situation with the supply of Russian raw materials to India is also affected by the surplus of oil supply on the market, he added.

"Now, for the first time in four years, India has the opportunity to choose oil suppliers. And this has a much greater impact on the situation than the pressure of [US President Donald] Trump on New Delhi," Belogoryev said, stressing that the reduction in the level of Russian oil supplies to India is offset by an increase in imports from China.