Home Commodities India Doesn’t Have Oil Payment Problems With Russia, Energy Minister Says

India Doesn’t Have Oil Payment Problems With Russia, Energy Minister Says

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  • India doesn’t have payment issues with Russia’s oil producers, the nation’s oil minister said.
  • Indian’s oil shipments from Russia have collapsed, sinking to an 11-month low in December.
  • But that’s because the nation is in search of better discounts, the oil chief said.

India doesn’t have payment issues with Russian oil traders, and oil imports from the country have collapsed simply because Russian crude is too expensive, according to India’s oil chief.

“There is no payment problem,” Hardeep Puri, the head of India’s Petroleum and Natural Gas ministry said at a press conference on Wednesday. “It is a pure function of the price at which our refineries will buy,” he added, per Reuters‘ report.

India still buys around 1.5 million barrels of Russian oil a day, and the nation is focused on getting energy at the best price, Puri said.

Meanwhile, other suppliers are offering better discounts on their oil than Russia, he added, though he declined to comment on which suppliers India was dealing with more. 

Indian purchases of Russian oil have fallen in recent months, with oil imports from the nation slumping to an 11-month low in December. 

The nation also appears to be turning away some Russian oil shipments that were already scheduled to arrive. Five tankers holding Russian oil recently turned around after a month of floating near the shores of India and Sri Lanka, according to Bloomberg ship-tracking data.

People familiar with the matter have said Indian oil refiners are paying for Russian crude in dirhams, the currency of the United Arab Emirates, Reuters originally reported. But a unit of Rosneft, the Russian state-run oil giant, hasn’t been able to accept payment, as it’s unable to open a bank account in the UAE, sources added.

Russia is known to offer its allies some of the steepest crude discounts on the market, a factor that’s led India to become one of Russia’s largest oil customers over the past year.

Sokol oil, a type of Russian crude that was recently turned away from India’s shores, traded around $72 a barrel this week, while Russia’s main Urals crude traded around $58 a barrel. Both grades are lower than the international benchmark Brent crude, which ticked higher to $78 a barrel Friday morning. 

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