India-Russia to push long-term arrangement for crude supplies at annual summit -

India-Russia to push long-term arrangement for crude supplies at annual summit

New Delhi and Moscow during PM Narendra Modi’s visit (July 8-9) will push for a long-term arrangement for crude supplies from Russia to India in the backdrop of rising Russian oil exports.

The need for a long-term arrangement enabling smooth supply of Russian crude to India at discounted rates has been under discussion between the two sides.

“We are a longstanding partner of Russian federation. We have had discussion with the Russians on long-term deals,” Oil Minister Hardeep Puri had said after being reappointed in the same portfolio under Modi 3.0.

“I am confident that both our private and public sector players will sign long-term deals with countries where they see benefit in doing so,” Puri had said, when asked if Indian state-run companies are looking at signing such deals with Russia.

Chief of Rosneft, Russian oil major, Igor Sechin had discussed the matter of India-Russia long term arrangement for crude during his two visits to India this year, ET has learnt. Russia continues to be the top oil supplier to India followed by Iraq and Saudi Arabia. State refiners BPCL and Hindustan Petroleum Corp are looking at signing term deals with Russia.

India witnessed a significant rise in oil imports from Russia in June 2024, reaching 1.97 million barrels per day (mbpd), the highest since July 2023. This increase, up by nearly 15% month-on-month and 2% annually, was driven by reduced Russian crude cargoes to China, redirecting more barrels towards India, it is understood.Indian Oil Corporation (IOCL), Bharat Petroleum Corporation (BPCL), Hindustan Petroleum Corporation (HPCL), and private refiners like Reliance Industries (RIL) saw substantial imports, with private refiners importing a record 871,200 barrels per day. Energy trade will be on the agenda when Modi meets Russian President Vladimir Putin across various formats over the next two days – private dinner, restricted and delegation level talks.

Russia has emerged as the major supplier of crude oil to India since the Ukraine war due to heavy discounts that it offered in its supplies. Payments for oil imported from Russia are made in international currencies.

In April the United States stated that it has not asked India to reduce Russian oil imports and Russian oil refined in India cannot be technically considered Russian oil.

A visiting US official here had then stated that the USA has also not sanctioned any Indian entity for dealing with Russian oil. would not breach the sanctions. “Once Russian oil is refined, from a technical perspective it is no longer Russian oil. If it is refined in a country and then sent forward, from a sanctions perspective that is an import from the country of purchase it is not an import from Russia,” the visiting official had then stated.

The price cap imposed by the Group of Seven (G7), the European Union and Australia bans the use of Western maritime services such as insurance, flagging the transportation when tankers carry Russian oil priced at or above $60 a barrel. Russia has started using its own fleet and insurance to supply crude to various countries including India

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