On Tuesday, 16 January, India’s oil minister, Shri Hardeep S Puri, indicated oil carriers from Russia face some hurdles in getting their shipments delivered to Indian ports. He said the Group of Seven (G7) nation’s price ceiling and shipping challenges are largely to blame.
Russian crude oil tankers not making port in India
The G7, the European Union (EU), and Australia capped the price of Russian diesel and petroleum at $60 per barrel to maintain a global supply while hobbling this country’s economy. This limit was set on 5 December 2022 and is one of the sanctions against Russia for invading Ukraine.
In December 2023, the US beefed up the G7 implementation of this cap by sanctioning several Russian oil merchants. In a Bloomberg interview in Davos, Puri summed up the situation:
In the Russian case, it is a question of price cap and it is also a question of some of their shipping entities coming under adverse notice of others. When Russian prices don’t conform, we buy from Iraq, the UAE, Saudi Arabia.
Russian oil sanctions
Reportedly, India took advantage of the substantial Moscow oil discounts when the Ukraine war started. In December 2023, these incoming cargoes dropped to an all-time low after the tightening of the sanctions. Bloomberg reported that some crude freighters were slowed, others turned around without delivering or switched off their locators when they couldn’t make deliveries to Indian shores.
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As the world’s third-largest oil consumer, India feels the current Russian oil discounts are not in their ballpark. Crude oil opened Tuesday’s trading at $72 per barrel and has been fluttering between the $70 and $80 mark for some time now.
