Indian Prime Minister Narendra Modi and Russian President Vladimir Putin. Mikhail Svetlov/Getty Images
The International Energy Agency reports that Russian oil shipments to India have fallen by 420,000 barrels per day.
The decline in production has reduced Russia’s monthly revenue from the energy sector by almost one percent compared to January.
Western sanctions are leading to India’s withdrawal as they undermine the discount on Russian crude oil.
This is a machine translation of an article from our US colleagues at Business Insider. It was automatically translated and checked by a real editor.
India cut back on purchases of Russian crude oil in February as Western sanctions hit trade between the two countries. The youngest Message According to the International Energy Agency (IEA), oil shipments to India fell by 420,000 barrels per day, bringing them to 1.2 million barrels per day.
New Delhi’s tight demand contributed to a decline in Russian crude oil revenues this month. Lower exports of oil and oil products brought Moscow almost one percent less than in January, amounting to $15.69 billion (14.40 million euros) last month.
Although Russian crude oil shipments were in line with December earnings, they fell to 4.75 million barrels per day, below the year-end peak of five million barrels per day. Lower production was partly offset by rising crude oil prices, with prices for Ural, Russia’s benchmark raw material blend, rising to over $4 (3.67 euros) a barrel in February.
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However, Indian buyers have turned away from Russia for the same reason, with New Delhi’s demand largely driven by discounted barrels. In 2023, India became the largest buyer of Russian crude oil by sea as Western sanctions drove down Russian prices.
Now Indian refiners are moving away from long-term contracts with Russia, and the country’s largest state-owned company, Indian Oil, is considering reducing the share of Russian crude in its long-term supplies.
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US sanctions are intended to reduce Russian oil revenues
The development was prompted by tightened enforcement of Western sanctions this year, as the US and its allies punish companies that violate restrictions such as the $60 per barrel (55 euros) price cap on Russian crude oil.
In February, the U.S. followed suit with a series of new sanctions that drove up shipping costs and reduced oil rebates, Indian sources told Reuters.
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These factors are one of the main reasons India is already returning to its traditional energy trade with the Middle East, especially after Saudi Arabia offered its own crude oil discount in January.
The same month, Indian Petroleum and Natural Gas Minister Hardeep Singh Puri warned that trade would turn away from Russia if sanctions were violated. “If Russian prices do not adjust, we will buy in Iraq, the United Arab Emirates and Saudi Arabia,” he said at the time.
But while India pulled back in February, shipments to China rose to 2.2 million barrels a day, up 100,000 barrels a day from the previous month, according to the IEA.
Read the original article in English here.