Due to the ongoing war in the Middle East, there is pressure on global oil supply. In such a situation, India has taken a big decision to handle the situation. According to the information, Indian refineries have purchased about 60 million barrels of Russian oil for the next month. Due to this, the possibility of fuel shortage in the country has reduced to a great extent.
oil purchased at premium
According to sources, this oil has been purchased at a premium of 5 to 15 dollars per barrel compared to Brent crude. According to data firm Kpler, this purchase is equal to this month, but more than double that of February. It is clear from this that India has rapidly changed its strategy.
Got support from American discount
The discount given by America was a major reason behind this purchase. America had allowed India to buy Russian oil loaded in ships before March 5. Later this exemption was further extended and purchase of oil present in the sea was also approved till March 12. This step was taken to meet the supply shortage due to the blockage in the Strait of Hormuz.
Refineries return to the market
Refineries like Mangalore Refinery and Petrochemicals Ltd and Hindustan Mittal Energy Ltd, which had distanced themselves from Russian oil late last year, have now become active in the market again. This is expected to strengthen the energy security of the country.
Emphasis on diversity in supply
India does not want to depend only on Russia. For this reason, it is also increasing oil purchases from other countries like Venezuela. According to Kpler, India can buy about 8 million barrels of Venezuelan oil in April, which will be the highest after October 2020.
Russia is benefiting
On the other hand, Russia is getting a big benefit from increasing demand and high prices. Since the Ukraine war, Russia’s earnings from oil exports have increased tremendously. Overall, India has taken a strong step towards securing its energy needs by adopting smart strategies amid the current crisis.