Russian crude oil supply to India shows signs of stabilising

India's state-owned refiners are in talks with traders selling Russian crude. 

These discussions indicate that there is sufficient supply to meet the current demand, according to a Bloomberg report. 

This eases concerns that the flow of crude could slow down in the coming months due to the recent US sanctions.

Industry executives revealed that offers for discounted Russian oil have surged as the March booking window for April-loading Urals cargoes opens later this week, according to the report. 

This increase is attributed to the availability of non-sanctioned traders, tanker owners, and marine insurance providers who can meet India's terms.

Indian refineries typically secure their crude oil deliveries from Russia approximately two months ahead of time. 

This advance booking strategy allows for efficient planning and coordination of shipping logistics, refinery operations, and inventory management. 

It also provides refiners with greater price certainty and helps to mitigate the risks associated with volatile oil markets.

Imports from Russia slipped in February

India's oil imports from Russia fell to their lowest point since January 2023, decreasing 13.4% month-over-month to 1.4 million barrels per day last month, according to Kpler, a data analytics firm. 

This drop followed Washington's sanctions on 161 tankers, causing middlemen shipping Russian crude to India to temporarily pause cargo offers in January. 

India had declared it would not allow sanctioned vessels to discharge at its ports, leading buyers to avoid them.

Indian buyers had expressed concerns and apprehensions earlier this year regarding the continuity of Russian oil imports. 

They were hopeful that new tankers and alternative intermediaries would emerge to facilitate the continued flow of Russian oil, despite the sanctions and restrictions in place. 

However, they also exhibited caution and pulled back from purchases, deliberately avoiding sanctioned vessels due to the potential risks and uncertainties involved. 

Some Indian buyers were even skeptical about the timely and successful delivery of shipments, fearing disruptions and delays due to the complex geopolitical situation and the potential for unforeseen complications.

Confidence improving 

Executives in the oil industry have reported that confidence and availability are both improving. 

This positive outlook is attributed in part to recent news that President Trump's advisors are exploring the possibility of lifting or adjusting certain Russian sanctions, including the oil price cap, if progress is made in peace talks. 

These developments have contributed to a more optimistic sentiment in the market.

However, industry insiders caution that the true test of this newfound confidence will be the upcoming month's bookings for May delivery. 

While the news of potential sanctions relief has been encouraging, the actual level of demand and the willingness of buyers to commit to purchases in May will be a crucial indicator of the market's sustained recovery.

Meanwhile, Kpler data showed that non-sanctioned vessels, such as the Shenlong, Bourda, and Rangler, which don't normally transport Russian crude, are now making their way to Indian ports. 

Easing pressure

The emergence of these new vessels is already evident in Indian trade and is contributing to easing pressure.

India has expanded insurance options by granting non-sanctioned Soglasie Insurance Co permission to insure vessels entering Indian ports until February 2026. 

Additionally, India has extended approvals for sanctioned providers Alfastrakhovanie and Sogaz Insurance Co.

Executives noted that the discounts on offered cargoes have decreased to $1-$3 per barrel compared to the benchmark crude. 

This decrease in discounts, from the previous $2.5-$3.5 per barrel, occurred before the implementation of new sanctions.