Refining groups in India have started accepting Russian crude that has been sitting aboard tankers in Indian waters, according to two people with direct knowledge of the transactions. The purchases are intended to help offset a reduction in crude volumes from Middle Eastern suppliers, the sources said.
India currently holds roughly 25 days of crude inventories, leaving the country exposed to disruptions in energy shipments, the sources added. New Delhi had been the largest buyer of Russian seaborne oil after Moscow's 2022 invasion of Ukraine, but refiners began curbing purchases in January - a change that helped the government avoid 25% tariffs imposed by the United States and supported the negotiation of an interim trade agreement.
On Thursday, the Suezmax tanker Odune, carrying about one million barrels of Russian crude, docked at the eastern Paradip port to deliver cargo to state refiner Indian Oil Corp, a shipping industry source said. The same person said the Odune had been anchored in Indian waters prior to berthing.
Indian Oil is also scheduled to take delivery of roughly 700,000 barrels of Russian crude aboard the tanker Spring Fortune at Vadinar port on the country's west coast on Saturday, the shipping source said. A source at Indian Oil told reporters the company is hastening its purchases of Russian oil, including cargoes loaded on vessels currently floating near India. Indian Oil did not immediately reply to a request for comment about these loadings.
An industry source with direct knowledge of Russian trade said about 9.5 million barrels of Russian crude are currently floating close to Indian waters and could be delivered within a matter of weeks. A separate source at another Indian refiner said that company was also weighing purchases of Russian oil that has been loitering nearby.
"Should Middle Eastern inflows tighten, Indian refiners could pivot back toward Russian grades relatively quickly," said Sumit Ritolia, an analyst at ship-tracking firm Kpler.
Kpler's vessel tracking data indicates there are about 30 million barrels of Russian crude available and loaded on tankers in the Indian Ocean, Arabian Sea region and the Singapore Strait, including volumes held in floating storage. Ritolia noted that some of those vessels had not yet declared a destination, and warned that if Indian refiners did not take action, the cargoes could start moving to China within a day or two.
The situation has resulted in a cluster of large vessels anchored or moving slowly in the wider region, with at least two sizable cargoes scheduled to make port calls in India in the coming days. Refiners and shipping observers say the floating inventory presents a near-term source of supply that can be mobilized quickly if Middle Eastern volumes tighten.
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