India’s Spot Oil Demand Declines as Russian Supply Stabilizes
India’s spot oil demand is decreasing as Russian crude supply returns to normal. Refiners are expected to secure over 60 discounted shipments for April. This follows a period of heightened US sanctions, which led to a rise in alternative oil purchases. Monthly crude exports from Russia to India have also declined this year. Overall optimism remains among buyers due to adjustments in US policy towards sanctions.
India has experienced a decline in spot oil demand as Russian crude supplies approach normal levels. This trend reflects the success of Indian refiners in circumventing United States sanctions. State-owned processors in India are expected to finalize over three dozen cargoes scheduled for loading next month, in addition to those arranged by private refiners such as Reliance Industries and Nayara Energy, leading to more than 60 shipments of Russian crude in April, equivalent to approximately 52 million barrels.
The reduction in demand follows a recent period during which flows between India and Russia decreased due to the implementation of stricter US sanctions. Consequently, Indian refiners began issuing various spot tenders, which required them to acquire oil from alternative sources at higher prices. Currently, traders have arranged sufficient “clean” Russian cargoes that comply with sanction regulations for April, enabling refiners to satisfy their spot demand while alleviating concerns regarding future supply.
The majority of these cargoes have been contracted at discounts of less than $3 per barrel compared to market benchmarks, a significant change from earlier this year, where discounts had dwindled to around $1 per barrel due to increased freight rates for Russian shipments. Monthly crude exports from Russia to India have also witnessed a drop, averaging 1.6 million barrels a day this year compared to an average of 1.8 million in 2024, according to data from Kpler.
This development is set against a backdrop of renewed optimism among buyers regarding Russian oil supplies. Recent statements from European officials suggest that the Trump administration has reduced its focus on enforcing sanctions, aiming to facilitate an end to the ongoing conflict in Ukraine.
In conclusion, India’s spot oil demand has decreased as Russian crude supplies stabilize, demonstrating the effectiveness of Indian refiners in navigating US sanctions. With over 60 discounted shipments anticipated for April, refiners are better positioned to meet demand and alleviate supply concerns. Despite a decline in Russian monthly exports, the overall sentiment among buyers remains optimistic, largely due to changing US policy regarding sanctions enforcement.
Original Source: www.business-standard.com
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