NEW DELHI: The average price of Russian oil delivered to top buyer India in October rose to $84.20 per barrel, way above the $60 price cap set by the Group of Seven nations in December last year, preliminary Indian government data showed.
India paid the highest prices for Russian oil in October since the price cap was imposed, providing a boost to Moscow’s revenues despite efforts by western nations to curb the producer’s income and funding for the Ukraine war.
India, the world’s third-biggest oil importer and consumer, has emerged as the biggest buyer of seaborne Russian crude as western nations cut purchases after Moscow’s invasion of Ukraine more than a year ago.
India purchased Russian oil at an average price of about $81.24 per barrel in September, according to Reuters’ calculations based on the latest data posted on the Indian Trade Ministry’s website.
India’s intake of Russian oil could rise on softening prices, a government official said last week.
India’s Russian oil purchases could rise as global oil prices ease
The price of Russia’s flagship grade Ural in Baltic ports has plunged since late November below the $60/barrel ceiling.
New Delhi wants to cut its crude import bill and the average cost of Russian oil is lower than that from Iraq and Saudi Arabia, the second and third-biggest oil suppliers to India.
The price of a barrel of oil from Iraq and Saudi Arabia in October averaged $85.97 and $98.77, respectively, the data showed.
Apart from direct supplies from Russia, Indian refiners also get Russian oil supplied from ports in Greece, Spain and Korea.
Refiners in India largely buy Russian oil on a delivered basis, with sellers arranging for shipping and insurance.
Adherence to the G7-fixed ceiling allows the use of Western services such as shipping and insurance in transactions involving Russian oil.
The Indian government data does not specify freight, insurance, or other charges paid by Indian refiners but it is significantly higher than the $60 per barrel price cap.
To curtail Moscow’s revenue and close loopholes in the mechanism designed to punish Moscow for invading Ukraine, the United States last month imposed sanctions on maritime companies and vessels for shipping Russian oil sold above the $60 price cap.
India depends on imports to meet more than 80% of its overall oil needs and rarely bought Russian oil in the past due to high transportation costs.
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