Energy News Beat
- India has been granted permission to unload sanctioned Russian oil at its ports until February 27.
- The US sanctions have disrupted India’s access to cheap Russian oil, and Indian refiners are scrambling for alternative supplies.
- India will continue to buy Russian oil only if it meets certain conditions, including a price cap of $60 per barrel and the use of non-sanctioned tankers.
India has received clarification from the U.S. that the Russian oil tankers sanctioned earlier this month are allowed to discharge their crude at Indian ports until February 27, Indian oil secretary Pankaj Jain said on Friday.
“There was a round of clarification by OFAC (the U.S. Office of Foreign Assets Control). Formally they did clarify that Feb. 27 is the deadline,” Reuters quoted the Indian official as telling reporters in response to questions about the end of the wind-down period.
The wind-down deadline for completing the financial transactions is March 12, according to Jain.
The outgoing U.S. Administration on January 10 imposed the most severe sanctions on Russia’s oil yet, designating two major Russian oil companies, Gazprom Neft and Surgutneftegas, as well as 183 vessels, dozens of oil traders, oilfield service providers, insurance companies, and energy officials.
The sanctions caught a few million barrels of crude oil en route to India in a precarious situation.
At least 4.4 million barrels of crude from Russia are currently being shipped to India, according to ship-tracking data compiled by Bloomberg and Kpler. Some of these are traveling on newly-sanctioned tankers and the fate of part of the cargoes is unknown.
For India, which imports more than 80% of the crude it consumes daily, the costs are spiking and the cheap Russian barrels are disappearing as Indian refiners steer clear of tankers explicitly sanctioned by the U.S.
The U.S. clarification about the deadline for sanctioned vessels to discharge their crude could be a relief for India, for the next month at least.
But Indian refiners are already scrambling for supply for arrival after February.
India will continue to buy Russian oil if it is sold below the $60 per barrel price cap and delivered on non-sanctioned tankers and without any involvement of sanctioned companies or individuals, the Indian official said today.
By Michael Kern for Oilprice.com
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The post Sanctioned Russian Oil Tankers Get Temporary Reprieve in India appeared first on Energy News Beat.
