India is not getting reduction in discount As a result of a significant decrease in discounts on Russian crude oil and difficulty with payments, India’s government refiners are reportedly considering purchasing crude oil from its usual suppliers in the Middle East.
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This comes in the wake of recent developments. India is not getting reduction in discount Refiners working for the government are currently in discussions with Iraqi officials about increasing their oil imports.
India is not getting reduction in discount on Russian crude oil
During the conflict that has been raging between Russia and Ukraine, Russia has provided India and China with discounted crude oil. India is not getting reduction in discount During the past few months, India has made record purchases of crude oil from Russia at exceptionally low prices. India is not getting reduction in discount As a result of this action, India had also passed Iraq, which had been the leading supplier of oil to India in the past.
However, the discount on Russian crude oil is decreasing and there are complications relating to payments. India is not getting reduction in discount In the meantime, there are reports that India’s government refiners are looking to their former oil exporting countries in the Middle East in order to acquire crude oil for their operations.
Refiners working for the state are currently in discussions with Iraqi officials to increase their oil imports. India is not getting reduction in discount A top official is said to have told the media that the price of Russia’s crude oil Ural is increasing and that it is being sold at a price that is higher than the price cap of $ 60 per barrel that has been imposed on Russian oil by western countries.
In recent days, there has been a precipitous decline in the discounts offered on Russian crude. If Russia is willing to sell oil to government refiners at a price that is greater than the price cap, then the government refiners will have no interest in purchasing oil from Russia.
There was discussion about maybe renegotiating the conditions with Iraq
According to the official, India has proposed to Iraq the possibility of altering some of the terms for the payment of oil. For instance, the state-owned refineries of India, Indian Oil Corporation (IOC), Bharat Petroleum Corporation (BPCL), and Hindustan Petroleum Corporation (HPCL), will lengthen the credit duration for oil from the current 60 days to the maximum 90 days in exchange for purchasing large volumes of oil from Iraq.
The official was referring to the practice of purchasing oil from India’s regular suppliers such as Iraq when he made his statement, “This is the cleanest deal.” Iraq has been a reliable ally as well as a reliable trading partner for us.
Before the war, Iraq was the largest source of oil in the region
Before the conflict between Russia and Ukraine, Iraq was India’s most important source of crude oil imports. Before Russia’s invasion of Ukraine, India bought very little oil from Russia. However, since Russia’s invasion, Russia has become India’s largest crude oil supplier and has done so in the previous 15 months. India is not getting reduction in discount Because of the sanctions imposed by the west, Russia offered India a significant price cut on its oil, which resulted in India purchasing a significant amount of oil from Russia.
At the moment, Russia is responsible for more than forty percent of the total oil imports made by Russia. Some estimates suggest that India used to receive a discount on Russian oil equal to 13 dollars per barrel when it was first purchased, but as of recently, this discount has been reduced to only 4 dollars per barrel. On the basis of the delivery cost, India is eligible for this discount.
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Prices for Russian uranium have surpassed the price ceiling
This week, the price of a barrel of Ural crude oil produced in Russia surpassed $60 for the first time since the beginning of December, when the price of a barrel of Russian oil was initially capped at that amount.
The Ural region is responsible for two-thirds of India’s oil imports from Russia. India is not getting reduction in discount The increase in the price of Ural can be attributed to the increase in the price of oil that followed the reduction in oil output by the major suppliers of oil throughout the world.
According to the official, IOC, BPCL, and HPCL have not purchased a single shipment of Russian oil at a price that is higher than the price cap of $60 per barrel up until this point, and they do not intend to do so in the foreseeable future either.
According to the price cap, the utilization of Western ships and the utilization of Western insurance services for the delivery of Russian oil is forbidden if the price of a barrel of Russian oil is more than $ 60. If this occurs, the price restriction will be lifted.
If Russia is paid in dollars or euros above the price cap, the payment may be halted because Russia is already prohibited from using dollars or euros for the trading of oil. India is not getting reduction in discount If the price cap is raised, Russia will be paid in dollars or euros. Because of this, Indian refiners and banks would want to avoid making payments of this kind.