India and China compete for cheap Russian oil

According to the International Economic Group of Fars News Agency, Reuters quoted industry sources as saying that Chinese private refiners are competing with their Indian counterparts to buy Russian ESPO oil in April.

According to this report, China and India have become the main buyers of Russian crude oil after Western customers avoided direct purchases of Russian energy exports.

China, which usually buys the entire volume of ESPO crude shipped from the Pacific port of Cosmino due to its proximity, is expected to import a record volume in March.

Independent Indian refiners Reliance Industries and Nayara Energy have bought at least five cargoes out of approximately 33 cargoes loaded with ESPO crude for April because of their low prices. This is while only one shipment has been purchased for delivery in March.

According to informed sources, the price of ESPO crude oil for April loading to India was $5 per barrel lower than the Dubai index.

Rising demand for Russian low-sulfur oil by Indian refiners has pushed prices above the $60-a-barrel price ceiling set by the Group of 7 on Russian oil shipments, according to Reuters estimates. China also buys ESPO shipments at a price above the price ceiling of this group.

In order to reduce the potential risk, Russian oil importers use other currencies instead of dollars to settle these shipments and also require sellers to provide transportation and insurance.

Competition from India has caused discounts for ESPO cargoes to be loaded for April to fall to $6.80 a barrel against Brent crude oil prices, sources familiar with the matter said. The discount figure for March was $8.50 per barrel.

It is expected that Russian oil shipments to China for March will reach an unprecedented figure of about 3 million barrels, of which 20 million barrels are ESPO oil.

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