Two Indian refiners suspend purchases of Russian oil – Raw Materials

Indian refiners Indian Oil and Bharat Petroleum have suspended purchases of Russian oil until there is clarity on the EU sanctions package against Moscow, which will take effect on December 5th.

The new package bans European insurers from taking out policies and providing other services to Russian trade. Both Indian Oil and Bharat Petroleum are among the public refiners buying the highest volumes of Russian crude so far.

India has become a major buyer of Russian oil as Brussels’ sanctions against the Kremlin intensified in the wake of the Russian invasion of Ukraine.

According to Bloomberg, the reserves of the two refineries are due to the fact that payment difficulties may arise for the delivery of barrels of Russian oil, as well as problems related to the location of the ships.

In the purchase of oil on the spot market – in which these situations apply – in which the purchase and sale is instantaneous, the risk is transferred to the buyer, which does not happen in business with long-term delivery contracts, in which the risk even remains within the sphere of the seller.

In principle, the EU allows the provision of services by Europeans to buyers of Russian oil, willing to purchase black gold up to a limit imposed by sanctions, an exception that, according to the US information agency, is due to the “lobby of the US Treasury”.

However, this detail has not yet been expressly enshrined in European legislation and it still depends on whether the ceiling on Russian oil purchases is approved within the framework of the G7.