Russia, facing tough Western sanctions over its invasion of Ukraine, warned the European Union in April about sweeping sanctions on coal, saying they would backfire if the fuel were diverted to other markets.
India has refrained from condemning Russia, with which it has long-standing political and security ties, and has called for an end to the violence in Ukraine. New Delhi defends its purchases of Russian goods as part of an effort to diversify supplies, saying a sudden shutdown would push up world prices and harm its consumers.
US officials have told India there is no ban on energy imports from Russia, but they don’t want “quick acceleration”.
But while European importers shun trade with Moscow, Indian buyers are guzzling huge amounts of Russian coal despite high freight costs.
Purchases of coal and related products have increased more than sixfold in the 20 days to Wednesday from the same period a year earlier, to $331.17 million, according to unpublished Indian government data reviewed by Reuters.
Similarly, Indian refineries have obtained cheap Russian oil shunned by western countries. The value of India’s oil trade with Russia in the 20 days to Wednesday has risen more than 31-fold to $2.22 billion, the data shows.
The Indian Ministry of Commerce did not immediately respond to a request for comment on Saturday.
“Russian merchants are liberal with payment routes and accept payments in Indian rupees and United Arab Emirates dirhams,” said a source. “The discounts are attractive and this trend of higher Russian coal purchases will continue.”
Buying coal continues
Offshore units of Russian coal merchants such as Suek AG, KTK and Cyprus-based Carbo One in Dubai and Singapore, among others, offered discounts of 25% to 30%, leading to bulk purchases of Russian thermal coal by merchants supplying utilities and cement producers. the thus sources.
The second source said Suek’s Singapore-based unit also accepted payments in dollars.
Suek and KTK did not immediately respond to requests for comment. Reuters was unable to reach Carbo One right away.
The EU ban has blocked new coal contracts and will force member countries to cancel existing contracts by mid-August.
India bought an average of $16.55 million a day of Russian coal in the three weeks through Wednesday, more than double the $7.71 million it bought in the three months after the February 24 Russian invasion, according to calculations by Reuters.
Oil purchases averaged $110.86 million a day in the 20-day period, more than triple the $31.16 million it spent in the three months ended May 26.
India’s bulk purchases of Russian coal are set to continue, with June imports expected to peak in at least seven and a half years, data from Refinitiv Eikon vessel tracking systems shows.
Bulk shipments of Russian thermal coal reached India in the third week of May, with orders coming from mainly cement and steel companies and merchants, according to shipment data collected by an Indian coal merchant.