India, the largest importer of Russian oil, has reduced its oil procurement from Russia and is ready to completely replace it with oil from Saudi Arabia, Reuters reported, citing its source.
India’s largest oil refineries, Bharat Petroleum and Indian Oil (the largest in the country) are already considering the option of purchasing 1 million barrels each from Saudi Aramco company.
Russian oil is creating increasingly more problems for India and is no longer so viable as it used to be. In particular, the purchase of Russian “Sokol” light low-sulfur crude oil is related to payment issues, according to the sources.
In addition, India has already reduced oil purchases from Russia due to unfavorable discounts.
As a result, Indian Oil company began to seek more oil supplies from Saudi Arabia and West Africa.
Moreover, Saudi Arabia cut prices to a 27-month low in January, and India’s largest refinery is interested in additional procurements. At the beginning 2024, amid lower demand Saudi Aramco cut prices for February deliveries of its key oil brand Arab Light around the globe. In case of Asia, prices dropped by $1.5-2 per barrel.
India is the third largest importer and consumer of crude oil.
Since the imposition of international sanctions, Russia has become the main oil supplier of oil to India, having driven out Iraq and Saudi Arabia.
It has to be mentioned, that payments are conducted in Indian rupees, which is very uncomfortable for Russia since it can’t substitute US dollar in this regard and deems transactions in Indian rupees senseless.
As a result, in December 2023 Russia has exported the lowest amount of crude oil to India since the beginning of the year.