Russia increases insurance coverage for oil imports from India

Russian companies increased insurance coverage for India’s oil imports to 60 percent of all commodities in July, significantly higher than 40 percent in December 2023, as the two nations continue to strengthen their energy ties, Reuters reported on Wednesday.

India has become the largest buyer of Russian oil, with more than 60% of Russia’s seaborne oil exports going to India. Using Russian insurers, Moscow can sell its oil above the $60-a-barrel threshold imposed by the West on Russian crude in an attempt to limit Russia’s oil revenues following the invasion of Ukraine. Western shipping and insurance services are allowed only for Russian goods sold at or below the price limit.

Last month, India BECOME the world’s largest importer of Russian oil, surpassing China. Indian trade and industry supply data showed the country imported 2.07 million barrels per day (bpd) of Russian crude in July, good for a 4.2% M/M and 12% Y/Y increase. That goes beyond July oil imports from China of 1.76 million bpd through pipelines and transports, based on Chinese customs data.

Indian refiners have been buying Russian crude at a discount to Brent since Western nations cut imports of Russian energy products following the Ukraine invasion. India’s purchase of Russian ESPO Blend crude rose to 188,000 bpd in July as larger Suezmax vessels were deployed. Refineries in northeastern China are typically the biggest ESPO buyers due to their proximity to Russia; however, they are now buying less because of the warm demand for fuel.

“India’s need for Russian oil will increase as long as sanctions are not tightened,“, an Indian refining source told Reuters.

Indian Oil Minister Hardeep Singh Puri has revealed that the country is prepared to continue buying oil from Russian companies that are allowed to make such sales, citing cheaper prices.

“If an entity is not sanctioned, there is no doubt that I will buy from the cheapest supplierhe said

By Alex Kimani for Oilprice.com

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