IndianOil Continues to Buy Russian Crude Amid US Pressure

Strategic Insights -

IndianOil, the country's largest refiner, is continuing to source crude oil from Russia despite US sanctions and penalties, said AS Sahney, chairman of the company. The US has imposed a 25% penalty on India for importing Russian oil, and the penalty is set to take effect on August 27. The company's decision to continue buying Russian crude is driven by economics, with Russian oil accounting for around 22% of the crude processed by Indian Oil in the June quarter. However, if a penalty is imposed, it may go beyond the company's scope.

Key Takeaways:

  • IndianOil is continuing to buy crude oil from Russia, despite US sanctions and penalties, said AS Sahney, chairman of the company.
  • The US has imposed a 25% penalty on India for importing Russian oil, which is set to take effect on August 27.
  • Russian oil accounted for around 22% of the crude processed by Indian Oil in the June quarter, and the company expects this share to remain relatively the same in the near future.
  • The decision to continue buying Russian crude is driven by economics, with Russian oil currently being sold at a discount of around $1.5 per barrel to the benchmark Brent.
  • Indian Oil is abiding by the price cap on Russian crude, but any penalty imposed by the US may go beyond the company's scope.
  • For Indian refiners, Russian oil makes up about a third of their requirements on average.

Statistics:

  • 22%: The percentage of crude oil processed by IndianOil that comes from Russia in the June quarter.
  • $1.5: The discount per barrel at which Russian oil is currently being sold compared to the benchmark Brent.
  • 25%: The penalty imposed by the US on India for importing Russian oil.
  • August 27: The date on which the penalty imposed by the US is set to take effect.

Sources:

  • IndianOil Chairman AS Sahney
  • US Treasury Secretary Scott Bessent
  • A BPCL executive
  • Reuters
  • News agency reports