Although the shipping costs charged by Russia-arranged businesses continue to be ”opaque” and higher than usual, sources indicated that the deep discounts on Russia crude oil that India gorged on during the Ukraine war have drastically decreased.
Three sources with knowledge of the situation stated that while Russia invoices Indian refiners at a price slightly below the $60 per barrel price cap established by the West, it charges anywhere between $11 and $19 per barrel, or twice the usual amount, for delivery from the Baltic and Black Sea to the west coast.
The prices for comparable distances, like a trip from the Persian Gulf to Rotterdam, are greater than the $11–19 per barrel transportation prices from Russian ports to India, some of which are on the 100+ tankers allegedly acquired by Russian actors for a shadow fleet.
Following Moscow’s invasion of Ukraine in February of last year, European consumers as well as certain Asian consumers, including Japan, sanctioned and avoided Russian oil. Due to this, Russian Urals crude was traded at a discount to Brent crude, the industry standard.
However, sources reported that the discount on Russian Urals grade has decreased from levels of approximately $30 per barrel in the middle of last year to closer to $4 per barrel.
Indian refineries, which turn underground crude oil extraction into finished goods like petrol and diesel, are currently the main consumers of Russian oil since Chinese imports have reached their maximum due to a widespread electrification of vehicles and demand problems in an unstable economy.
To obtain the reduced oil, Indian refiners increased their purchases from less than 2% of their total imports prior to the Ukraine War to 44%.
