India turns to Saudi as Russian oil buys fall in December

January 02, 2024 07:56 pm | Updated 07:56 pm IST - New Delhi

India increased imports of Saudi oil in December as payment problems drove its Russian oil buys to an 11-month low, with at least five cargoes of the sweet Sokol variant heading to other locations, data from vessel tracking agencies showed.

Indian Oil Corporation (IOC), which was set to get the Sokol oil, had to withdraw from its inventory and buy from West Asia to make up the shortfall, sources told Reuters last month. IOC is the only state-run firm with an annual deal to buy several grades of Russian oil, including Sokol, from oil major Rosneft.

India’s oil imports from Russia in December declined 16%-22%, based on Reuters calculation of data gleaned from flow tracking agencies Vortexa, Kpler and LSEG. Its imports of Saudi oil, rose by about 4%, however, data from Kpler and Vortexa showed. LSEG data shows India’s monthly Russian oil imports declining by 22% to 1.21 million barrels per day (bpd) in December, while Kpler shows a drop of 16% to 1.39 million bpd.

“Perhaps it’s still too early to write off India’s appetite for the Sakhalin grade (Sokol),” said Viktor Katona, lead crude analyst at Kpler, adding that three new Sokol cargoes on the NS Antarctic, Jaguar and Vostochny Prospect were heading for India. Aframax ships NS Century, NS Commander, Sakhalin Island, Lityny Prospect and Krymsk; and a very large crude carrier Nellis carrying Russian Sokol oil for IOC were sailing for the Strait of Malacca, Kpler and LSEG ship tracking data showed.

The NS Century faced sanctions imposed by the United States in November 2023 for the sale of Russian oil at a price above the cap of $60 a barrel fixed by the G7 grouping of nations and had been floating near Colombo since. “China appears to be the final solution for some cargoes,” said Katona.

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