Indian State Refineries Halt Russian Oil Imports: Sources

The reported halt in Russian oil imports by Indian state-run refineries, as cited by unnamed sources, could be driven by several factors:

Payment Issues: Sanctions on Russia may be complicating financial transactions, making it difficult to settle trades in preferred currencies (USD/EUR). India might be exploring alternatives like rupees or dirhams, but negotiations could be stalled.

Price Disputes: Russia may no longer be offering the steep discounts that made its crude attractive to Indian buyers post-Ukraine war. With global oil prices fluctuating, Indian refiners could be seeking better terms elsewhere.

Alternative Suppliers: India might be shifting back to traditional Middle Eastern suppliers (e.g., Iraq, Saudi Arabia) if their pricing becomes competitive or due to long-term contract obligations.

Geopolitical Pressure: The U.S. and EU have previously warned against circumventing sanctions. While India has maintained a neutral stance, secondary sanctions risks (e.g., on shipping, insurance) could be influencing this decision

Logistical Challenges: G7’s price cap mechanism and shipping constraints (e.g., lack of insurance for tankers carrying Russian oil above the cap) may have increased costs or delays.

Domestic Factors: Indian refiners could be adjusting inventory ahead of monsoon season or refinery maintenance cycles, temporarily reducing demand.