India is very close to make a deal to buy 3.5 million barrels of discounted crude oil from Russia. According to the reports, Russia will take care of shipping and insurance to deliver the barrels of crude oil to India. This will be a relief for Indian Oil Refining companies as they are facing a hurdle to buy Russian crude.
If the deal goes through then it will signal that India has kept it doors open to trade with one of its oldest allies. The discounts given on Russian crude will help in lowering the cost of crude for India though the current amount is not very large.
India consumes more than 4.5 million barrels of crude oil in a day and the deal is to buy 3.5 million barrels. The delivery will be made over a span of few months and the ports involved in import have also not been disclosed.
Cabinet Minister Hardeep Puri told upper house of Parliament i.e. Rajya Sabha that Indian Government is showing interest to buy discounted crude oil from Russia. Payment method for this transaction is not clear as India is working to make a rupee-rouble arrangement.
The government is looking for a route through Indian banks that do not have businesses with Western countries and Russian banks that have branches in India.
The final decision will be taken in few days as India is also considering other options. India imports 85% of its oil needs. From April 2021 to January 2022 India has imported over 176 million tones of crude oil out of which 3.6 million tones was Russian crude.
This means that 25 of crude imports of India come from Russia alone. Russia exports mainly two types of crude; Sokal and Urals. Ural is exported through Black Sea from port of Novorossiysk.