Crude oil

Indian Refiners Face Reduced Discounts on Russian Crude Oil

Indian refiners purchasing Russian crude oil are experiencing a decline in discounts, while the transparency surrounding the shipping rates remains a concern. Russia sells oil to Indian refiners below the price cap imposed by the West, but the delivery charges from the Baltic and Black Sea to India are twice the standard rate, ranging from $11 to $19 per barrel.

Indian Refiners Become Top Buyers of Russian Oil

Despite the narrowing discounts, Indian refiners have emerged as the largest buyers of Russian oil due to Chinese imports reaching their limits. If the Indian refiners had negotiated together, the discounts could have been higher, but they are currently negotiating deals separately.

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Invoicing Below Cap, but Shipping and Insurance Rates Opacity

While the invoicing for oil remains below the price cap, the shipping and insurance rates continue to be unclear. These rates are based on quotes from three agencies, introducing opacity into the system. The Baltic Exchange’s shipping indicators are no longer applicable, and additional tankers are being booked on a non-transparent time charter basis.

Changes in Shipping and Insurance

The proportion of Russian oil-loaded ships insured by the EU, G7, or Norway has decreased since the war in Ukraine. Notably, UAE-registered tankers account for a significant portion of oil shipments.

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