Indian Refineries Adapt Supply Chains to Continue Russian Oil Imports Despite Sanctions
India's oil refiners are actively reconfiguring their supply chains to maintain imports of discounted Russian crude amid tightening US sanctions.
Rebuilding Supply Chains
To circumvent the sanctions, refiners are collaborating with merchants, shippers, and insurance providers not on Washington's blacklist. They are utilizing existing entities unaffected by sanctions and creating new ones to replace compromised businesses.
Adapting to New Challenges
Following January's sanctions targeting vessels and entities assisting Moscow, Indian buyers faced a shortage of around 18-20 cargoes of Russian crude for March loading. However, refiners remain optimistic about fulfilling these gaps with Russian supplies to avoid purchasing costlier alternatives.
Russia's Evolving Trading Landscape
Russian trading entities have rapidly adapted to sanctions, creating new players to continue trade. Dubai and Hong Kong have emerged as hubs for shell trading and shipping companies facilitating Russian oil transactions. This fluid market environment poses challenges for US sanctions enforcement.
Alternative Options
In addition to revising supply chains, Indian refiners are exploring other options to disguise the origin of Russian crude. They may utilize onshore storage tanks to rebrand sensitive oil into shipments that can be more freely traded.
International Dynamics
India's continued reliance on Russian oil reflects mutual necessity: Moscow requires buyers beyond China, while Indian buyers face challenges securing favorable deals with traditional Middle Eastern suppliers.
Conclusion
Despite the complexities created by sanctions, Indian refiners are determined to maintain access to Russian crude at reduced prices. Ongoing efforts to adapt supply chains and explore alternative strategies demonstrate their commitment to cost-effective oil procurement.