According to three persons familiar with the situation who have knowledge of the case, the Russian oil company Rosneft is delaying the signing of new crude oil deals with two Indian state refiners because it has already committed sales to other customers.
Sanctions against Moscow
Since the imposition of sanctions against Moscow on February 24 for its invasion of Ukraine, which Russia refers to as a “special military operation,” Indian refiners have been snapping up cheap oil from Russia. Western companies have shunned this oil and countries since sanctions were imposed against Moscow.
Supply deals with Rosneft
It is possible that Indian refiners may have to buy more expensive oil on the spot market if they are unable to negotiate new long-term supply deals with Rosneft. It also shows that Russia has able to continue exporting its oil despite the mounting pressure from Western sanctions that are intend to strangle Moscow’s earnings. Read More
Three Indian state refiners
In the beginning of this year, Rosneft began negotiations with three Indian state refiners. Indian Oil Corp, Bharat Petroleum Corp, and Hindustan Petroleum, for supply deals that would last for six months. These refiners were draw to the savings that were being provided. Read More
To this point, only IOC, the largest refiner in the country, has signed a contract with Rosneft. Under the terms of the agreement, IOC will acquire 6 million barrels of Russian oil each month. And it will have the option to buy an additional 3 million barrels. The Russian company has apparently denied the requests made by the other two refiners since then, according to the sources. “Rosneft is taking a wait-and-see approach about the possibility of negotiating a contract with HPCL and BPCL. One of the sources stated that they are claiming they do not have sufficient volumes.
The requests for comments made by Reuters were not met with a response from Rosneft, IOC, HPCL, or BPCL. Russia is increasing the amount of oil it ships out of its key eastern port of Kozmino by almost one fifth in order to satisfy. The burgeoning demand from purchasers in Asia and mitigate the effect of sanctions imposed by the European Union.