India increased its purchases of Russian crude oil in January from already historic levels in December.
Amazingly, despite Washington’s pleas to the rest of the world not to purchase Russian fuel, the United States has emerged as the largest consumer of refined products.
India’s daily purchases of Russian crude oil have skyrocketed to 1.7 million barrels per day (bpd) in January, a sharp increase from the record-breaking 1.2 million bpd in December 2022.
If Europe wasn’t buying, “people were wondering where all the Russian Urals crude could go.” They argued that India couldn’t possibly take more when it took 1.2 million bpd in December. And in January, it was 1.7 million bpd, according to lead crude analyst Viktor Katona of the data and analytics company Kpler.
Historically, the US has been a significant consumer of virgin gas oil, a Russian refined product (VGO).
Now that it can no longer purchase VGO directly from Russia, it is doing so from Indian refineries run by Reliance Energy and Nayara Energy, whose VGO is produced using Russian crude oil.
The largest exporters are Reliance and Nayara:
The US purchases finished goods from Reliance daily of 200,000 bpd, mostly VGO. Unexpectedly, the United States is where Indian products are most frequently exported. Reliance and Nayara are the two biggest exporters to the US, according to Katona.
The two biggest consumers of Russian crude are Reliance and Nayara, but other large public sectors players like IndianOil Corporation (IOC), Bharat Petroleum (BP), and Hindustan Petroleum (HP) have also made significant investments in the market.
Everyone is purchasing. It has evolved into a national pastime,” claims Katona.
Discount of $10 for India:
Approximately 68 tankers have berthed in Indian ports or are en route there. On the market, India is reportedly receiving a discount of about $10.
“If India receives a $10 discount, the refiners could save $10 million per tanker,” claims Katona. Ships are docking at all the major ports, including Kochi for BP, Paradeep for IOC, and Sikka for Jamnagar.
There are also a few tankers that have docked or are moving toward Mumbai, Mangalore, Mundra, Chennai, and Visakhapatnam.
India has ignored Western requests to stop buying Russian oil since the start of the Ukraine war nearly a year ago, calling instead for dialogue and claiming that its 1.4 billion people need Russian crude to ensure their energy security.
The US has also been working to replenish its strategic reserves, which were depleted as a result of the Russian sanctions ban and efforts to prevent an increase in gas prices at US gas stations.
Dissecting VGO:
“If your refinery is advanced, you can convert VGO into more complex hydrocarbons.” It is a semi-product that works well for producing transportation fuel.
It’s remarkably good for transportation fuels, especially diesel, according to Katona. It can also be transformed into gasoline.
India uses about 5.4 million bpd of crude oil each month. Therefore, about 30% of our crude oil now comes from Russia.
Another 15% to 20% come from domestic sources, and the remaining 50% come from outside sources. We no longer purchase as much from Saudi Arabia.
India is now the world’s second-largest consumer of Russian oil, trailing only China, but we are the biggest consumer of consignments delivered by ship. China receives a sizable quantity via pipeline.
Europe has almost entirely stopped purchasing Russian crude as a result of the sanctions.
Only Bulgaria is exempt from this restriction and is permitted to purchase shiploads of Russian crude.
But the surprise is that despite periodic protests about India continuing to trade with Russia in defiance of Western-led sanctions imposed in the wake of its invasion of Ukraine, the United States has emerged as the largest consumer of refined oil products from India.
Sanctions imposed by the United States and the European Union on Russian oil exports “do not apply to refined products made from Russian crude exported from a third country as they are not of Russian origin.”
If Europe wasn’t buying, “people were wondering where all the Russian Urals crude could go.” They argued that India couldn’t possibly take more when it took 1.2 million bpd in December.
According to Viktor Katona, a lead crude analyst at the data and analytics company Kpler, it was 1.7 million bpd in January.
According to the newspaper, India increased its daily purchases of Russian crude oil to 1.7 million barrels in January of this year.
The US had been a major consumer of virgin gas oil from Russia (VGO). But because it can no longer buy VGO directly from Russia, it now buys it from Indian companies Reliance Energy and Nayara Energy, which make the VGO from Russian crude oil.
The US purchases finished goods from Reliance daily of 200,000 bpd, primarily VGO.
Unexpectedly, the United States is where Indian products are most frequently exported. Reliance and Nayara are the two biggest exporters to the United States.
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