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Kolkata: That Reliance Industries is disengaging from the Russian oil firms after the US sanctions on Rosneft and Lukoil, two of the largest oil producers in Russia, was known. Recent reports indicate that it has sourced 1 million barrels of heavy crude from Kuwait Petroleum Corp through a tender. Quoting multiple trade sources, media reports have said that last week, Kuwait Petroleum Corp floated a tender and Reliance utilized the opportunity.
The tender was floated since Al-Zour refinery of Kuwait was unable to process the crude since it was paralysed by an accidental fire that necessitated a shutdown for maintenance operations. On offer was 500,000 barrels of Kuwait Heavy Crude. Intended for loading on December 6-7 it was earmarked for Reliance Industries. Another consignment of equal volume of Eocene crude that is scheduled for loading on December 8-9 were also awarded to Reliance. However, there was no information on the price at which the deal was clinched.
Following the US sanctions on Rosneft and Lukoil, Reliance has purchased 12 million barrels of spot crude from American sources and those in West Asia, reported stated.
According to data of the Centre for Research on Energy and Clean Air, in October this year, India remained the second biggest purchaser of Russian crude, despite the US sanctions. Last month Indian buyers spent 2.5 billion euro, or more than $2.89 billion, from Russia, the European think tank said. China remains the top importer of Russian crude.
On October 22, the US administration imposed sanctions on Rosneft and Lukoil in a step designed to disrupt the flow of resources that Donald Trump allege Kremlin is using to fund the aggression in Ukraine. As an outcome of these sanctions, Indian companies such as Reliance Industries, HPCL-Mittal Energy and Mangalore Refinery and Petrochemicals have suspended importing from Russia as of now.
On the other hand. reports signal that Russian crude suppliers have started offering steeper discounts as buyers stay away from Rosneft and Lukoil. While the discounts ranged between $1.7-4 per barrel in October, they have now deepened to $5-6 in the past fortnight, reports stated. "As buyers like India are moving away from Russian suppliers that are sanctioned, the discounts would increase to attract more buyers," Prashant Vasisht, senior vice-president and co-group head, corporate ratings, Icra was quoted in the media as saying.
