According to industry sources quoted by Bloomberg, in less than 1 week, the total volume of Russian oil purchased by India reached about 30 million barrels - almost equivalent to the amount of Russian crude oil that India imported in February, when the average import level reached nearly 1.1 million barrels per day.
Most of this oil has actually been loaded on oil tankers but has not found buyers. For months, many Russian oil tankers have had to anchor or move slowly around Asia, becoming floating storage facilities at sea due to US sanctions that make trading difficult.
The situation changed rapidly after the US allowed India to temporarily buy some Russian oil blocks. This decision opened up opportunities for Indian oil refineries to supplement reserves in the context of a volatile market.
India's strong purchase move also took place at the same time as oil supplies from the Middle East were seriously disrupted. After attacks by the US and Israel on Iran, Tehran responded by targeting ships moving through the Strait of Hormuz - the world's most important oil transport route.
In the past week, many oil shipments from Saudi Arabia and Iraq have been unable to leave the Persian Gulf due to security risks in this narrow strait. This has forced major importers in Asia to quickly find alternative sources of supply.
Indian companies have taken advantage of this opportunity to buy Russian oil at unprecedented speeds. According to market sources, oil blocks were purchased at prices 2 to 8 USD/barrel higher than Brent oil prices.
Brent oil prices have increased sharply in recent days. Since the end of last week, this oil price has continuously traded above 85 USD/barrel. By the morning of Monday (March 9), the price once approached the 120 USD mark before falling again. By the morning of March 12, Brent oil prices increased again to above 100 USD/barrel.
Before the Middle East conflict broke out, Russian oil in the Asian market was often sold with a discount of more than 10 USD/barrel compared to Brent, including the buyer's port transportation costs. Meanwhile, Brent oil prices for most of the time since last summer only fluctuated in the range of 60-70 USD/barrel.
Two Indian businesses playing the biggest role in this purchase are the state-owned oil corporation Indian Oil and the private corporation Reliance Industries. Each company is said to have purchased about 10 million barrels of oil in recent days.
After a meeting with G7 Finance Ministers, EU Economic Commissioner Valdis Dombrovskis said that the US emphasized that the immunity mechanism for India is only temporary and has a limited scope.
According to him, the US believes that this decision will not have a significant impact on Russia's oil revenue.
However, in reality, new developments show that Russian oil still plays an important role in the Asian energy market. When supply from the Middle East encounters problems, large customers such as India are willing to return to buy strongly to ensure energy security.
