How US sanctions on Russian oil export will impact Indian oil companies? Yogesh Patil explains
Yogesh Patil, V-P, Dolat Capital, says Long-term contracts won't be affected by crude sourcing agreements with Russia, but spot purchases of Russian oil, which account for 40-45% of India's imports, will be impacted. Discounts on Russian crude were about $3 per barrel recently, but Indian refiners will now need to source oil from the Middle East without discounts, affecting their gross refining margins. Currently, petrol, diesel, and LPG prices are somewhat frozen, preventing companies from passing increased crude costs to consumers, leading to challenges for OMCs amid rising prices. On a positive note, ONGC and Oil India are expected to report strong results due to a weakening rupee, rising oil prices, and the removal of the windfall gain tax. However, ONGC's stock fell on Monday, likely due to concerns over its investments in Russian assets.
How major could be the impact of the new sanctions by the US on Russian oil on global crude oil prices? Where do you see oil prices headed globally?
Yogesh Patil: On Friday evening, the Biden administration imposed sanctions on the Russian export oil supply chain and two major oil companies including Gazprom Neft Gas, which are involved in export of closer to one million barrels per day oil on a daily basis. Secondly, they have sanctioned closer to 180 vessels, which are exporting the oil to different nations and lastly on some insurance companies.
So, the sanctions are on the whole of oil export supply chains from the Russian side. How is it going to impact mostly the
