Indian Oil to continue buying Russian crude from non-sanctioned entities: official

Indian Oil Corp. will continue to buy Russian crude but only from non-sanctioned entities, the company's finance director said Oct. 28, adding that this would help the state-run refiner meet the obligations of US and EU sanctions.

"Russian crude is not sanctioned. It is the entities and the shipping lines that have come under sanctions. Today, if somebody comes to me with a non-sanctioned entity, and the cap is being complied with, and the shipping is okay, then I will continue to buy it," Anuj Jain said on an investor call.

"We are absolutely not going to discontinue as long as we are complying with the sanctions," he added.

His comments came after IOC chairman Arvinder Singh Sahney told Platts, part of S&P Global Commodity Insights, that the company would strictly follow all the requirements of any international sanctions as required while planning its oil imports or exports in the future.

The US imposed sanctions on Rosneft and Lukoil on Oct. 22. The following day, the EU enacted comprehensive transaction bans on Rosneft and Gazprom Neft, alongside sanctions targeting Lukoil's subsidiary Litasco and the trading division of PetroChina, China's largest energy company. The Indian government has not officially responded to the latest round of sanctions.

Roadmap

Petroleum and Natural Gas Minister Hardeep Singh Puri said Oct. 28 that India was not concerned about crude oil availability, as global supplies are sufficient to meet future growth in both domestic consumption and oil product export demand.

India's overall crude imports from Russia, its largest supplier, averaged 1.75 million b/d during January-September, according to data from S&P Global Commodities at Sea.

S&P Global said in a research note dated Oct. 28 that the new US sanctions on Russian oil companies would further complicate the ongoing purchases by Indian firms. Indian compliance with US sanctions is usually high, and the government will likely attempt to negotiate sanctions exemptions instead of violating sanctions and risk facing secondary sanctions.

"However, should non-sanctioned Russian entities be used as a channel to sell Russian oil to India at discounts that India has obtained so far, Indian purchases would continue, unless President Trump specifically states that a wider trade deal with India is inconceivable unless India completely halts import of Russian oil, which appears unlikely," according to the research note.