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Some Indian refiners are trying to keep importing cheap oil from Russia, working with traders, shippers and other intermediaries to restore supplies amid U.S. sanctions.
Bloomberg reports that executives said existing networks are being rebuilt with the help of trading organizations, tankers and insurance companies that are not subject to sanctions. Some of them are not affected by the restrictions, while others are being created anew, replacing those that were blacklisted.
Since the restrictions were imposed, India’s largest buyers, including Indian Oil Corp Ltd., Bharat Petroleum Corp Ltd., Mangalore Refinery & Petrochemicals Ltd. and Reliance Industries Ltd., have started buying Russian oil at discounts. Purchases have grown from a small share of total imports to about a third. But that all changed in January when Washington imposed new sanctions on tankers and entities that help Moscow.
According to some experts, state-owned oil refineries missed a total of 18-20 cargoes of Russian oil for loading in March, equivalent to 14% of India's monthly imports.
This week, state-owned oil refining executives said that brand-new Dubai-based trading companies, including L-Oil and Sccton, had entered the spot market, offering Russian cargoes to Indian buyers. While the names were new, executives said the individuals and traders behind them were well-known. These new iterations replaced firms such as Black Pearl, Guron Trading, and Demex Trading, which were hit with U.S. sanctions.
However, Indian oil refineries and companies involved in the marketing of Russian oil have other options – including the use of above-ground tanks to disguise the origin of the oil.
Rebranding by ship-to-ship transshipment is already a common strategy used by Chinese buyers to disguise Iranian oil. Onshore storage tanks were not previously as popular due to their higher cost.
Russian oil exports – latest news
In 2024, Russian oil product exports by sea decreased by almost 10%. This was influenced by Ukrainian drone strikes on large refineries, rising financing costs, and government bans on gasoline exports.
On January 22, it became known that tankers that previously transported oil from western Russian ports were being diverted east to transport oil to China. As a result, the fee for transporting Russian ESPO oil to China increased even more.
It later became known that trade in Russian oil shipped to Asia stopped in March, as the cost of freight for tankers that were not subject to US sanctions jumped sharply as ports in China and India avoided ships from the "blacklist."
