India is expected to gain more channels to buy cheap Russian oil, with a new wave of smaller, international traders tapping into its huge market by offering barrels shunned by rivals after the invasion of Ukraine.
State-run refineries such as Indian Oil Corp. are excited about the idea of buying from the lesser-known merchants. Refinery officials said they found it easier to work with them rather than directly with Russian producers because there is less bureaucracy slowing down negotiations with companies like Rosneft PJSC.
Companies like Wellbred and Montfort have marketed Russian oil to Indian buyers and have joined Coral Energy and Everest Energy as more traders emerge to fill the gap left by larger traders like Vitol Group, officials said. refused to be named. According to their websites, the companies have offices in Switzerland, Dubai and Singapore.
No one responded to emails sent to IOC, Wellbred and Montfort, and Rosneft did not respond to a request for comment. Traders and shipbrokers said they didn’t know much about the firms, other than occasionally dealing with fuels.
Trading houses often act as intermediaries by bridging differences between sellers and buyers. In theory, some companies can continue to work with Russian entities sanctioned under certain jurisdictions, help with financing and logistics, and even offer different payment terms to help move funds. Sri Lanka received Russian crude oil aboard a ship chartered by Coral Energy in May and has since purchased more from the trader.
“Indian refiners are willing to risk dealing with these new little-known traders because the discounts are too good to pass up,” said Vandana Hari, founder of Vanda Insights. “We know that the Indian refineries want the Russian cargoes delivered. So as long as the new traders meet that need, it will work,” she added.
The new crop of merchants recently offered stocks of Russian Ural oil at discounts of about $8 a barrel, officials said. They are also strengthening staffing levels, they said. Wellbred’s employees include former individuals of larger companies such as Glencore Plc and Gunvor Group.
Some traders are offering payment options in alternative currencies, such as the United Arab Emirates dirham, according to officials. Separately, India’s central bank has announced a plan to settle international trade in the local currency.
As the shift takes place, Indian Oil, the country’s largest processor, has been importing Russian oil at a record pace, catching up with its private competitors, according to analytics firm Kpler. Inflows averaged 450,000 barrels per day in July — up 44% from last month — while total Russian barrel purchases in India rose 3% to around 1 million barrels per day, Kpler data shows.
India’s traditionally agile private oil processors, such as Reliance Industries Ltd. and Rosneft-backed Nayara Energy Ltd., had already doubled their purchases from the smaller companies, even before the world’s largest oil traders cut their exports of Russian crude oil in May.
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