Some Indian refiners are looking to import diesel and other refined products from Russia for local consumption to free the locally produced products for exports to the West, a report by the Economic Times (ET) said. The European Union (EU) announced a ban on exporting refined petroleum products from Russia effective February 5.
“Our people are exploring if we can source cheaper products from Russia…If India can import so much crude, it can, of course, import products as well. But imports of products must make commercial sense. We are in the business to make money,” an executive at an Indian refiner told ET.
G7 countries, including the EU, have imposed a price cap on refined Russian products. For India, Russia has already become the top crude oil supplier accounting for 28 per cent of the country’s total crude imports. In 2021, before the war broke out in Ukraine, this was under 1 per cent. The imports may soon expand to petrol and diesel as well, ET added.
With the imports, India can maintain a domestic inventory of refined products like petrol and diesel. This can be used during the time when the domestic refineries will shut for maintenance later in 2023.
India might not be the only country showing interest in refined products from Russia.
“There is a possibility that India could look to import the discounted Russian diesel barrels. But Africa, the Middle East and to a certain extent South America, could also be potential markets vying for these discounted barrels as well,” Serena Huang, an analyst at energy cargo tracker Vortexa said.
India has long been an exporter of refined products to southeast Asia. Of late, India’s focus has shifted to western markets. This is mainly because they are offering better prices due to the ban on Russian products. However, India has also been subjected to sharp criticism from western countries for importing oil from Russia.
