Mukesh Ambani-led Reliance Industries, India’s top buyer of Russian crude has scaled back 24% imports from sanctioned entities, as per a report by The Economic Times. It’s a 13% cut in it’s entire crude basket for the month of October against September.
The move is reportedly coming after US sanctions on Moscow’s two major oil firms, Rosneft and Lukoil, alongwith US continuous pressure on India to reduce the purchase of russian oil. Ahead of sanction that will take effect on November 21, the ET report noted Reliance Industries imported 534,000 barrels per day (bpd) in October, 23% below the April-September average, citing data from Kpler.
Russia’s share in Reliance Industries’ crude slate fell to 43% in October, from 56% in September.
Important to note that along with sanctions on Russian refinery, the US has also imposed 25% additional tariff on Indian import because India is one of the major buyers of Russian oil. It is also one of roadblocks in their trade talk.
According to Kepler, Russia’s crude exports to India averaged 1.19 million barrels per day (bpd) in the week till October 27. This is a big drop from 1.95 million bpd recorded over the previous two weeks.
Export from Rosneft dropped to 0.81 million bpd in the week to October 27 from 1.41 million bpd the week before. Lukoil, on the other hand, recorded no shipments to India in that week, down from 0.24 million bpd earlier.
Reliance Industries says it will comply with US, EU, UK restrictions
Previously, on October 23, US President Donald Trump stated that India had agreed to reduce its Russian oil purchases. Earlier, Reliance Industries has also informed the exchanges that it will comply with all the new restrictions and guidelines announced by the European Union, United Kingdom and the United States on crude oil imports from Russia and exports of refined products to Europe.
The company said it is currently assessing the implications of these sanctions, including new compliance requirements. “Whenever there is any guidance from the Indian Government in this respect, as always, we will be complying fully,” Reliance Industries said in a statement.
Russian oil shipments to India slide 39% in late October
The ET report noted that to make up for the fall in Russian crude imports, Reliance Industries increased its purchases from the Middle East — with Saudi supplies rising 87% and Iraqi volumes up 31%, taking their combined share in the company’s crude basket to 40% in October from 26% in September. Imports from the US also nearly doubled, accounting for around 10% of Reliance’s total crude intake, up from 5% in September.
Larger impact may be seen in coming months because these Russian cargoes received that were received in October would have been ordered in August, as orders are placed roughly a month in advance of loading with tankers taking another month to reach India.
EU outlines conditions for fuel exports from mixed-source refineries
An EU clarification issued last month explained how refiners can still export fuels to Europe even if they import Russian crude. “If Russian crude oil can be segregated and processed separately by the refinery, import into the EU is allowed, subject to proving that the petroleum product exported to the EU comes from the ‘production line’ using non-Russian oil,” the EU said.
If a refinery can’t segregate Russian crude, it can still export to the EU by proving that no Russian oil has entered that production line in the past 60 days, it added.
