MOSCOW/NEW DELHI: Discounts for Russian flagship Urals crude oil for delivery to Indian ports in July hit their narrowest levels since 2022 as spot supplies have tightened, four traders involved in the market said on Friday.
Narrowing discounts and tight spot supplies are nudging Indian refiners to scout for alternatives through buying tenders.
Spot discounts for Urals crude narrowed to $2.25 per barrel on average for cargoes arriving in India in July, from $2.70 to $3.10 per barrel to dated Brent on delivery ex-ship (DES) basis in the previous month, the sources said.
That is the narrowest discount for Urals oil cargoes sold to India since the Ukraine war broke out in 2022.
India became the largest buyer of Russian seaborne crude after Moscow diverted its energy supply away from the European Union which imposed a ban.
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Some Indian refiners which do not have long-term supply agreements with Russian oil companies are not getting enough Urals oil in July, the sources said.
India’s largest private refiner, Reliance Industries, locked in a term supply contract with Russian oil giant Rosneft last year, which reduced the availability of Urals in the spot market, they said.
Russian oil traders cited higher demand for the grade from refiners in Turkey, which has recently increased buying, boosting competition with Indian refiners over the supply.
Turkey’s largest oil refiner, Tupras, resumed buying Urals in April after stopping earlier this year, because of tougher U.S. sanctions on Moscow.
Two of the traders also said improving refining margins globally also helped boost Russian oil demand as refiners are eager to increase crude runs.
India remains the biggest buyer of Russian Urals oil by sea, with imports hitting a 10-month high in May.
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