As Russian discounts fall, Indian refiners join hands to negotiate better terms
livemint.comNEW DELHI : With discounts on Russian crude oil dwindling, India, in a first such effort, has brought together state-owned and private oil refiners to jointly negotiate for higher discounts and better terms with Russian suppliers, including Russia’s largest oil company Rosneft PJSC. The government-led joint sourcing strategy involves leveraging India’s position as the world’s third-largest crude oil buyer to get better discounts on Russian oil, which have dropped to about $3 per barrel from a high of $10 earlier, said two people aware of the development. The calibrated strategy—involving Indian Oil Corp.
(IOC), Bharat Petroleum Corp. Ltd (BPCL), Hindustan Petroleum Corp. Ltd (HPCL), Reliance Industries Ltd (RIL), and HPCL Mittal Energy Ltd (HMEL)—may help save on India’s significant oil import bill, they said, requesting anonymity.
Russia, facing sanctions from western economies following its invasion of Ukraine, is currently the top supplier of crude to India, allowing India to save billions of dollars from the deep discounts on offer. Those discounts, however, have been reducing in recent months. “The discount on Russian oil is coming down.
While the Russians are tough negotiators, we have an advantage as we are speaking to them as one," one of them said. “Our point is simple: if they don’t offer more discounts to India as a market, then we can look elsewhere. A lot of oil is flowing." Energy security is key to India’ national security as the country imports over 80% of its oil requirements.
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