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World|economy|April 13, 2023 / 09:21 AM
India remains top destination for Russian Urals oil

AKIPRESS.COM - India remains the main destination for Russia's seaborne Urals oil, with about 70% of such exports heading to the country, Reuters monitoring and data from two industry sources showed on Monday, Reuters reported.

Attractive prices for Urals mean good margins for Indian refiners while term contracts between Russian and Indian companies and lower freight rates are also helping keep supplies elevated, one of the sources said.

Last month Russia's Rosneft and Indian Oil Corp (IOC) announced a supply deal for up to 1.5 million tons of Russian oil (11 million barrels) per month from April 1.

Urals oil shipments to China, meanwhile, have not increased significantly in April. In the first ten days of the month just one 100,000-tonne cargo was fixed for shipment to the country's ports, although traders noted that Chinese refineries were asking for late April-early May loading cargoes.

Some 280,000 tons of Urals will be sent to China from the Al-Hoceima ship-to-ship (STS) facility off the coast of Morocco, to which the oil was supplied in March.

"China is buying Urals, but not as actively as was expected," a trade source involved in Russian oil trading said. "Refiners in other Asia-Pacific countries are also interested, but many are still afraid of sanctions, so marketing is slow," they added.

Urals deliveries to STS facilities in the Mediterranean continue to decline, with no cargoes shipped so far in April.

Russia's Gazpromneft shipped 140,000 tons of Urals from Novorossiisk to Myanmar in April, having supplied it for the first time in March.

In 2018, Indian oil companies signed an agreement to purchase up to 9 million barrels of oil from Russia’s Rosneft. This was part of a larger deal worth over $5 billion that also included the joint development of oil and gas fields in Russia and India.

In 2019, Indian oil company Nayara Energy (formerly known as Essar Oil) signed a deal with Rosneft to increase its crude oil supplies from Russia. The transaction reportedly cost $4 billion.

India and Russia agreed to work together to develop India’s strategic petroleum reserves in a memorandum of understanding (MoU) they signed in 2020.

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