Russia's hopes for cheap Russian crude dashed: Rosneft says no crude

- European Union's ban on insurance for tankers carrying Russian crude hits crude oil exports

Ahmedabad: After India's private refineries imported huge quantities of Russian crude from February to the end of May, the country's three state-owned companies approached Russia for cheaper crude oil. With global crude oil prices hovering at a 15-year high, the prospects for cheaper crude oil could be a huge relief to India. This is because Russian companies no longer have crude and have been shown to be unable to meet the needs of state-owned companies.

Russia invaded Ukraine in February, and the ongoing war has pushed the price of crude oil, the world's main fuel, to a high of ૨ 171 a barrel, up from 3.

India imports 84% ​​of its crude oil needs and is one of the largest importers in the world.

Russia, the world's largest crude exporter, was ready to help India with the problem. The United States has banned Russian crude. Russia has been excluded from the Russian currency and from the global payment gateway Swift, so there is no buyer of Russian currency in the global market. Russia has offered to offer its Ural crude at a discount of 50 a barrel against global prices. Private refineries in India have also started buying. Following this, three state-owned companies also entered into a long-term agreement with Russia to buy cheap KD.

Imports of private refineries increased

According to a Bloomberg report, India has imported 40 million barrels of crude oil from Russia since the war began in May. These imports are 20 per cent higher than the previous year. Currently, both Reliance Industries and Nair Energy (owned by Russian company Rosneft) import Russian crude oil. Indian Oil Corporation has signed an agreement for 3 million barrels per month. At present, only Reliance and Naira are importing Russian crude oil.

Surprisingly, Russian companies have stated that they are no longer crude and cannot supply surplus crude oil to Indian companies. Sources in the tank have received a report from the global news agency Reuters. If this is true, the purchase of cheap crude oil could bring relief to Indian consumers, and the government's calculations to control the country's trade deficit could be overturned.

Mediterranean countries, especially Italy and Turkey, have higher imports of Russian crude oil than India. The two countries account for one-third of Russia's total exports of 4 million barrels per day of Ural crude. India's share of Russia's total crude exports in May was 9 per cent, up from 5 per cent in April.

Russia refuses to supply crude to other companies

India's Hindustan Petroleum and Bharat Petroleum also demanded cheap crude oil from Russian company Rosneft, but the company has now refused to enter into agreements with the other two companies, according to a Reuters report. Rosneft now has no room to increase exports and has entered into an agreement to export as much as it produces, the company said.

Europe's insurance rules are also a hurdle

In addition, the European Union has banned the insuring of tankers exporting Russian crude. Marine cargo ships owned by European countries, which do not have insurance even though they have contracts to export crude oil due to the ban, are no longer ready. The possibility of Russia supplying crude oil to Iran as an alternative and then shipping it from there has also been explored, but this could be hampered by the fact that the global business of marine insurance is largely in the hands of Europe and Britain.