Sat. Apr 13th, 2024

Tighter Sanctions Affect Supply of Sokol Grade, Prompting India to Increase Iraqi Oil Imports

India’s crude oil imports from Russia experienced a second consecutive monthly decline in January, reaching their lowest level in a year, as per preliminary ship tracking data. The impact of stricter Western sanctions on the supply of light sweet Sokol grade played a key role in this decline. To compensate for the drop in Russian oil imports, India increased its imports of Iraqi oil.

According to data from LSEG, imports from Russia decreased by 4.2% to 1.3 million barrels per day (bpd), while ship tracking agency Vortexa reported a steeper decline of 9% to 1.2 million bpd. The reduction in Russian crude discounts, recent U.S. sanctions on carrying Russian crude above specified price caps, and increased tanker premiums have collectively made Russian crude less appealing for Indian refiners, explained Serena Huang, Vortexa’s Head of APAC Analysis.

The possibility of further declines in India’s imports of Russian crude is suggested, highlighting the ongoing impact of geopolitical factors on oil trade dynamics. Last year, India emerged as a significant buyer of discounted sea-borne Russian oil following the cessation of imports by Western countries after Moscow’s invasion of Ukraine.

However, in December, Washington imposed sanctions on ships carrying Russian oil sold above a $60-per barrel cap set by the Group of Seven nations. Banks and service providers were directed to prevent cargoes from breaching this price limit, leading to diversions of several tankers meant to deliver Sokol crude to India.

The detailed data table outlines India’s preliminary imports from its top three suppliers, showcasing the impact on Russian oil imports and the compensatory rise in imports from Iraq. – The Blaze Times

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