India Expects No Disruption To Russian Oil Supply Until March

Authored by Tsvetana Paraskova via OilPrice.com,

• India will allow Russian oil cargoes booked before US sanctions to be discharged until March.

• This move aims to mitigate the immediate impact of sanctions on India, the world’s third-largest oil importer.

• India faces potential disruption to its oil supply after March if alternative sources are not secured.

Following Friday’s U.S. sanctions against tankers shipping Russian oil, India expects its flows of crude from Russia not to be disrupted until March as the sanctioned tankers will be allowed to discharge until then, a senior Indian government official told Reuters on Monday.

India will allow cargoes carrying Russian oil booked before January 10 to discharge at ports when they arrive at Indian coasts, according to the official who spoke on condition of anonymity.

The outgoing U.S. Administration on Friday 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.

A large part of the newly sanctioned tankers by the U.S. have carried Russian crude mostly to China and India over the past year, according to analysts and ship-tracking data.

The latest U.S. sanctions have already started moving oil markets and the oil-purchasing strategies in Russia’s top crude oil customers, China and India.

Oil prices jumped on Friday as the U.S. sanctions were announced, and Brent Crude broke above $80 per barrel to hit the highest level in three months.

The rally continued on Monday, with Brent jumping to a four-month high of over $81 per barrel.

Prices will eventually fall back below $80 per barrel because there is no shortage of supply on the global oil market, the anonymous Indian government official told Reuters.

“The market is waiting for Russia to respond on sanctions,” the official told the newswire, adding that “Russia will find ways to reach us.”

India is bracing for a major disruption to Russian oil supply, which is currently the single largest source of crude for the world’s third-largest oil importer.