Even as uncertainty over the G7 countries placing a price cap on Russian crude oil persists, Indian refiners imported $720 million, or roughly ₹5,800 crore, worth of crude oil from Russia in the first fortnight of November.

The inbound shipment from Russia during November 1-15 was the fourth highest in the last nine months. For comparison, during the first fortnight of September 2022, India imported a record $1.35 billion worth of oil, an all time high for a fortnight, data compiled by Finland-registered Centre for Research on Energy and Clean Air (CREA) showed.

Russia’s share in Indian crude oil imports surged from around 1 per cent before February 2022 to 21 per cent in October. In November, it is expected to be in the same range, albeit a little lower, sources said.

Price cap fears

However, Indian refiners are treading cautiously on booking supplies from Russia in anticipation of the price cap and impending sanctions, scheduled from December 5, which are expected to disrupt seaborne transport. Some oil marketing companies (OMCs) are still contracting crude from Russia, taking advantage of the January 19 unloading deadline.

A top government official said: “It seems the price cap will be a diluted version of what was being projected four months back, which will benefit India. Global oil trade dynamics is also undergoing a shift with India inching towards Russia and Europe towards Middle East. One thing is clear: nobody wants Russian supplies to stop as the consequences would be catastrophic.”


An OMC executive said: “It is obvious that refiners will wait for clarity on price cap before securing new supplies because flagging a vessel, its marine insurance, etc needs to be fixed.”

Some refiners booked crude oil supplies as there is a little wriggle room for transport. Quite a lot of these contracts are in anticipation of the uncertainties related to the cap. So those supplies will be coming in the first fortnight of January. More clarity is expected post December 5, the official explained.

S&P Global Commodity Insights, in a November 10 report, said the US clarified on October 31 that any Russian-origin cargo loaded before December 5 and discharged by January 19 is not subject to price cap. Allowing Russian crude to be unloaded before January 19 gives oil markets some wiggle room to get used to the new measures.

“But insurance and shipping service companies still want to know when the sales price for a Russian cargo would be recorded and how price would be verified. It remains unclear also how disputes over pricing and cargo origination would be resolved,” it added.

Reaping benefits

A senior government official said, “Media reports suggest the price cap at $65-70 a barrel, which should benefit Indian refiners. At present, discount on Ural is around $20-22 per barrel. If we can secure supplies in price range of $68-72, it will be a good deal.” However, this is half of the story, and the rest will depend on shipping logistics, but it seems that the “price cap severity would dilute further,” he added.

The EU and G7-based shipowners enjoy a large market share in the Russian tanker trade with S&P Global data suggesting that they lifted 55 per cent of Russian crude exports from the Baltic and Black Sea in September. The G7 estimates that about 95 per cent of the global oil tanker fleet is covered by shipping insurers in G7 countries.