Russia is selling record volumes of crude oil to India to fill a gap in energy exports following the EU ban.

  • According to Vortexa, Russia is selling record volumes of crude oil to India to cover its shortfall due to the EU oil ban.
  • Indian imports reached a record 1.2 million barrels per day in December and 1.3 million barrels per day in the first two weeks of January.
  • “Russia has succeeded in persuading Indian refiners to increase purchases of its oil,” said Vortexa, head of Asia-Pacific analysis.

According to a recent Vortexa report, Russia is selling record volumes of crude oil to India to fill a gap in energy exports after the European Union banned imports in December.

An energy analyst firm said Russia was transferring 1.2 million barrels of crude oil per day to India in December, setting a new record.

And Russia should break that record in January, with nearly 1.3 million barrels a day already shipped in the first two weeks of this month, Vortexa said. Russian oil now accounts for 60% of India’s oil imports, up from 48% in December.

“Since the EU ban went into effect last December, the redistribution of Russian oil has gone much more smoothly than many market participants expected,” Serena Huang, head of Asia-Pacific analysis at Vortexa, said in a note. “Russia has succeeded in persuading Indian refiners to increase purchases of its oil as the EU turns its back.”

While the volume of oil sold to India has skyrocketed, Moscow’s revenue from it is limited by low prices. In December, the EU banned Russian offshore oil and imposed a $60 price cap, which prevents other countries from using the EU’s shipping and insurance services unless the oil is sold below the cap.

These restrictions caused Russia’s crude oil revenue to fall by $15 million in the last week of 2022, and the country was forced to divert 90% of its oil to Asia to make up for lost business.

And while China and India have increased their purchases of Russian oil, they have been able to demand bigger discounts, which Bloomberg estimates are costing Russia about $4 billion a month.

Oil markets could be further disrupted when the EU bans Russian oil products, including diesel and fuel oil, on February 5.

EU officials are also weighing various price caps with $100 per barrel caps for Russian diesel and $45 for Russian fuel oil.

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