New Delhi: Amid intensified war between Russia and Ukraine, it was reported on Wednesday that Indian Oil Corporation (IOC) has purchased nearly 3 million barrels of crude oil that Russia had offered at steep discount to prevailing international rates. Sources aware of the matter told news agency PTI that the IOC bought crude for May delivery at a discount of USD 20-25 a barrel to dated Brent.
Notably, the oil purchase, made through a trader, is the first since Russia’s February 24 invasion of Ukraine that brought international pressure for isolating Putin administration.
The development comes as the US and other western nations imposed sanctions on Moscow, and Russia started offering oil and other commodities at discounted prices to India and other large importers.
As per the reports, the IOC made the purchase on modified terms that require the seller to deliver it to the Indian coast so as to avoid any complications that sanctions may lead to in arranging shipping and insurance.
The sources said that unlike the sanctions the US imposed on Iran over its controversial nuclear programme, oil and energy trade with Russia has not been banned. This means international payment systems are available to settle any purchase made from Russia, they said.
This wasn’t the case with Iran, which was cut off from the international money and security transfer system, SWIFT. Also, companies or entities investing or buying oil from Iran were sanctioned.
On the other hand, India, which imports 85 per cent of its oil needs, is looking to cut spiralling energy bill through purchases from anywhere it can get at cheaper rates.
On Monday, Union Oil Minister Hardeep Singh Puri had told the Rajya Sabha that the country will evaluate the Russian offer to sell crude oil at discounted prices after considering aspects such as insurance and freight required to move the fuel from the non-traditional supplier.
“Let me again reiterate that in a situation like the one characterised by the pandemic in the last two years and in the last few weeks by a war or a military action taking place between Russia and Ukraine, the government will explore all options which are available,” he had said.
“Discussions are currently underway. There are several issues which are required to be gone into like how much oil is available either in Russia or in new markets or with new suppliers which may be coming in the market. Also, there are issues relating to insurance, freight and a host of other issues including the payment arrangements,” he had stated.
New Delhi has historic diplomatic and defence ties with Moscow and has called for an end to the violence in Ukraine but stopped short of condemning the invasion.
Many countries, including European nations, remain heavily dependent on fuel from Russia, the world’s second-largest crude oil exporter behind Saudi Arabia. India buys just 1.3 per cent of all its oil needs from Russia.
(With inputs from PTI)
