Indian refiners are set to reduce their reliance on spot crude tenders as Russian oil supplies normalize, reflecting a significant shift in India's energy import strategy. State-owned refiners are expected to receive over three dozen cargoes of Russian crude for April, while private refiners like Reliance Industries Ltd. and Nayara Energy Ltd. will add to the tally, pushing the total beyond 60 shipments or nearly 52 million barrels. This stabilization highlights how Indian refiners are successfully navigating US sanctions on Russian oil shipments.

Steady Russian Crude Supply Reduces Spot Tenders

Over the past few months, Indian refiners had to turn to alternative oil suppliers due to the tightening of US sanctions on Russian crude. This led to a surge in spot tenders as Indian refiners sought pricier alternatives. However, with traders now securing "clean" Russian cargoes—which means shipments not involving US-sanctioned entities—the demand for spot tenders has significantly reduced.

Discounted Russian Crude Attracts Indian Buyers

The return of Russian crude supply has stabilized pricing, with discounts settling below $3 per barrel to benchmarks. Earlier in 2024, the discounts had narrowed to as little as $1 per barrel, as sanctions drove up freight costs for Russian oil. With logistics improving, Indian refiners now enjoy a more consistent and cost-effective supply of Russian crude.

Impact of US Sanctions on Russian Oil Shipments

The dip in Russian crude flows to India earlier this year was driven by the transition phase of US sanctions enforcement. However, as diplomatic stances evolve, European officials have noted that the Trump administration has reduced its involvement in sanction enforcement, allowing a smoother flow of Russian crude to India.

Russian Oil Trade Trends with India

Data from Kpler shows that Russia’s monthly crude exports to India have dropped to 1.6 million barrels per day in 2024, compared to an average of 1.8 million barrels per day in 2023. While volumes have dipped slightly, the strategic trade adjustments and discounts continue to make Russian crude a key component of India’s energy imports.

Looking Ahead: India’s Crude Oil Strategy

With Russian crude supplies stabilizing, Indian refiners are expected to focus on long-term supply agreements rather than relying on expensive spot market purchases. This will not only enhance energy security but also keep import costs in check. Market watchers will be closely monitoring the evolving US-Russia-India oil trade dynamics in the coming months.

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