FLOWS TO DROP FURTHER IN APRIL
If India stopped buying Russian oil, Moscow would have to try to re-route it to China at lower prices, which would take time, and cut production and exports, said Igor Yushkov, an analyst at Russia’s government-run Financial University.
“Output and export cuts would lead to an oil shortage. Hence, we are not seeing a full US ban on Russian oil imports – they would suffer themselves from higher oil prices,” said Yushkov.
Russian oil exports and production have stayed largely resilient in the face of some 30,000 Western sanctions imposed on Moscow over its war in Ukraine since 2014.
Moscow has managed to redirect oil flows away from Europe to China, India and Turkey. Like India, Turkey has also cut purchases in recent months amid tougher Western sanctions.
Russia’s total oil exports stood at 4.91 million barrels per day in December, with China being the largest buyer at 2.3 million barrels per day of crude, according to the International Energy Agency.
India’s government has given no instructions to refiners to stop buying Russian oil, and they would need a wind-down period to complete purchases already in place for March, sources said.
India will cut Russian imports in April when one of its top refiners, Russian-backed Nayara, carries out a one-month maintenance at its 400,000 barrels per day plant, a trader in Russian oil said.
Volumes beyond April will be decided by Russia-Ukraine peace talks and the Indian government’s broader stance, traders said.
Trump said India could buy more US and Venezuelan oil to replace Russian purchases.
US crude cannot replace Russian oil on a like-for-like basis due to quality differences, while Venezuela’s exports are small, said Alexandra Hermann, Economist at Oxford Economics.
Crude from Saudi Arabia, the UAE and Iraq are more likely candidates to substitute Russian oil, said Yushkov.
But deep discounts may still make Russian crude difficult to resist for Indian buyers, he added.
https://www.channelnewsasia.com/asia/trump-india-tariffs-russia-oil-us-5906811
