In order to guarantee ongoing imports of Russian oil in spite of more stringent US sanctions, India is creating a sanctions-proof supply chain. In order to reorganize supply networks, refiners are working with shippers, merchants, and middlemen. These networks include tankers, new sales organizations, and insurance companies that Washington has not placed on its blacklist. Some are new businesses created to replace those that are currently prohibited, while others are already-existing businesses unaffected by sanctions.
The amount of discounted Russian crude being purchased by major Indian buyers such as Indian Oil Corp Ltd, Bharat Petroleum Corp Ltd, Mangalore Refinery & Petrochemicals Ltd, and Reliance Industries Ltd has increased from a small amount to roughly a third of total imports since restrictions were put in place. But in January, Washington stepped up its pressure on ships and organizations supporting Moscow, banning almost 160 tankers.
State refiners and Reliance missed 18 to 20 cargoes of Russian crude for March loading as a result of this round of sanctions, which caused Chinese and Indian buyers to scramble. This amounts to 20 million barrels, or 14% of India’s monthly imports. India is trying to resolve problems with unsanctioned ships, insurance reconfiguration, and payment processing, but it still hopes to bridge the gaps with Russian supplies. The quick changes in trading entities have allowed Russia to adjust. In the spot market, new Dubai-based trading companies like L-Oil and Sccton have replaced US-sanctioned companies like Black Pearl, Guron Trading, and Demex Trading by offering Russian cargoes to Indian buyers.
Onshore storage tanks are another way for Indian refiners and organizations selling Russian crude to conceal the oil’s source. For instance, Russian oil that has been dumped into an onshore tank in Fujairah can be rebranded for international trade by being loaded onto a new ship as cargo of UAE origin. Chinese buyers seeking to conceal Iranian crude already frequently employ ship-to-ship transfers.
Indian Oil Minister Hardeep Singh Puri has said that India has a variety of crude sources and options, even though he has called for Moscow to continue to give discounts. According to Russian First Deputy Energy Minister Pavel Sorokin, sanctions shouldn’t stop energy trade and Russia will continue to provide India with oil in an economic and legal manner. Sanctions, Sorokin continued, are unlawful and have takena negative impact on the world economy, raising prices and causing uncertainty.
