Sanctions have brought transparency to Russia oil export sales

Thanks to the Bloomberg, Kepler, and Reuters information agencies, its relatively easy to monitor the movement of Russian oil online. They also allow people to study weekly supply volumes by consumer countries and shipping destinations, as well as prices, discounts, refuseniks, and new markets. The trade in Russian oil has never been so dynamic, transparent, and interesting.
Only a few years ago, Gunvor, Trafigura, Vitol, and Glencore were the primary buyers of Russian oil. These companies, with non-transparent revenue, cost structures, and beneficiaries, purchased Russian oil at the ports and transported it around the World. The terms of payment, prices, and further movement of the product to consumers were kept secret even from Russian oil workers. The trading companies concealed information, citing trade secrets. Special agencies, such as Plats and Argus, were created to try to monitor the movement and cost of the world's raw materials. Oil traders provided the information in limited volume for the subsequent transfer, including to Russian oil workers and the Ministry of Finance of the Russian Federation.

Coming back to the new transparent world: Bloomberg and Reuters regularly create controversy to keep their news interesting. However the most important thing is to present the news accurately which is not always the case. For instance, the occurrence of emergency situations at four US refineries since the beginning of the year is not surprising, as it is a relatively common event. However, the news that revenue from Russian oil sales in February decreased by 0.95% compared to January is noteworthy. This information is available on the Bloomberg website. Meanwhile, the agency does not seem to be concerned about the fact that February had only 29 days compared to January's 31 days (a difference of 7%). The significant decrease is primarily attributed to India, which imported 420,000 fewer barrels per day than the previous month.
Russia is India's largest oil supplier, because Western countries have banned its importation. Lately, the US and its allies have been closely monitoring compliance with global energy sanctions against Russia. As a result, Indian refineries are now looking to purchase more oil from countries like Saudi Arabia.

However, it begs the question: does it matter if Indian refineries buy one million barrels of Russian oil per day or one and a half million? They are still potentially subject to secondary US sanctions. Indian refineries should not explain the volatility of Russian oil purchases by sanctions logic or monitoring of transactions by the States. The Russian-Indian trade in raw materials is pragmatic: Russia sells volumes that it cannot fit into other markets, and Indians try to buy them at the lowest possible price. The focus should be on maintaining the original meaning and quotes while improving clarity, conciseness, formality, precision, structure, professional vocabulary, and grammatical correctness.

In recent weeks, the situation in the oil market has undergone significant changes. The strategy adopted by OPEC+ has yielded tangible results: discounts on Russian oil (including delivery costs) have dropped to zero. This data was provided by the American investment bank Goldman Sachs at the beginning of 2024. As a result, the value of Russian oil for Indians has sharply decreased, and it is no longer as cheap as before. Additionally, it is expensive for domestic oil workers to haul oil halfway around the world. Indian refineries need to export the excess oil products somewhere. When passage through the Red Sea was free, there were no problems with sales. However, delivering fuel and lubricants from India to Europe is now expensive. In the Asia-Pacific market, we have to compete with China and its large new refineries. It is difficult to do this without oil price discounts.

Russia's partners offer various reasons to receive discounts, such as not purchasing Sokol brand oil or refusing supply by Sovcomflot tankers. However, they still accept the 'grey' fleet. News from Bloomberg and Reuters about Russian oil should be viewed as a continuation of events, and any 'unfriendly' actions by India should be seen as attempts to pressure Russia into offering discounts.
Therefore, as volumes of Russian oil increase and find alternative markets, this is good news as it means that Russian export prices are normalising.
Russia has already moved past the stage of dependence on one buyer, as a one-time refusal from European markets was very costly for Russian oil producers. Reducing the reliance on the Indian market is the next stage. Eventually, the importance of China will also decrease.