By Rhod Mackenzie
The discount on Russian oil for Indian refineries have dropped to $4 a barrel from previous peaks of $25-30, as sellers are waiving offloading tariffs to cover the gap with benchmark Brent crude and bypass Western-imposed price ceilings, Indian media has reported.
According to The Times of India , citing sources, Russian oil now accounts for about 40% of India's total imports, while before the start of the military conflict in Ukraine, its share was less than 2%. The owners of Indian refineries buy Russian oil on a delivery basis, and the seller arranges delivery and insurance. The publication writes that this aspect has become even more important after the introduction of a ceiling on the price of Russian oil, "which made delivery or insurance difficult to obtain."
As an unnamed source who participated in the auction told the publication, this, as well as fragmented purchases of refineries, is what sellers of Russian oil take advantage of, who charge $ 11-19 per barrel of freight from the ports of the Baltic or Black Seas, which is almost twice the norm, and oil is sold at a price of 1-2 dollars below the limit, Kommersant reports.
The source is confident that Indian buyers "may soon lose the discount" if oil prices continue to decline and close the gap with the price ceiling. According to him, three little-known agencies can easily play tenders and bring the cost of Russian oil closer to the price of the standard - now it is 75-76 dollars.
He sees the only way to protect India's interests is through "collective bargaining", especially with state-owned refineries.
Earlier, the United States called on India to comply with the price ceiling for Russian oil.
This article originally appeared in Russia at vz.ru