Whalesbook
India Navigates Russian Oil Waiver Expiry
Market participants say the U.S. waiver allowing Russian crude oil purchases to expire poses little immediate risk to India's energy supply. Refiners expect to manage the change smoothly, supported by slowing domestic demand and a wide range of alternative oil sources.
Slowing Demand Aids Supply Management
Major private refiners, including Reliance Industries Ltd. and Nayara Energy Ltd., are undergoing maintenance. This has temporarily lowered India's need for crude imports. The lower demand has helped boost Russian crude oil in floating storage to over seven million barrels globally, a fivefold rise in one month, giving Indian processors flexibility.
Diverse Global Supply Sources Secure Needs
Traders report ample prompt-loading crude offers from the United States, UAE, Oman, and Iraq, in addition to Russian oil. Although Middle Eastern supplies are lower than before the war in Ukraine, these sources, along with China's reduced activity in the spot market, help maintain overall supply. India also holds strategic reserves covering about 60 days of crude oil and LNG use, adding to supply security.
Russian Oil Remains Key Despite Waiver End
Sumit Ritolia, a manager at Kpler Ltd., noted that few alternatives match Russian crude in scale and price, especially with global uncertainties. "India is unlikely to move away from Russian crude in the near term," Ritolia said. He highlighted the strategic value of discounted Russian oil, a key source for India since 2022. Hindustan Petroleum Corp. Chairman Vikas Kaushal confirmed similar buying patterns, purchasing Russian oil along with supplies from Africa, the U.S., and Venezuela, even if prices aren't perfectly aligned.