Nayara buys Urals after 1 year; IOC books another 3 million barrels

This is the second purchase of Urals by IOC since Russia invaded Ukraine on February 24
Last Updated : 23 March 2022, 17:08 IST
Last Updated : 23 March 2022, 17:08 IST

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Indian private refiner Nayara Energy, part-owned by Russia's Rosneft, has purchased Russian oil after a gap of a year, buying about 1.8 million barrels of Urals from trader Trafigura, two trade sources said and Refinitiv data shows.

Indian companies are snapping up Russian oil as it is available at a deep discount after some companies and countries shunned purchases from Moscow due to sanctions over its invasion of Ukraine.

On Wednesday Indian Oil Corp, the country's top refiner also bought 3 million barrels of Russian oil via a tender for May loading from trader Vitol, traders said. This is the second purchase of Russian oil by IOC this month.

India, the world's third-biggest consumer and importer of oil has also not banned Russian oil imports, unlike several Western countries.

Nayara's deal, struck after Russia launched what it calls a "special operation" in Ukraine on February 24, involves the use of Liberia-flagged aframax Moskovsky Prospect, managed by a unit of Russia's state-run shipping firm Sovcomflot, Refinitiv data show.

Sovcomflot was blacklisted by the United States last month. Britain and Canada also banned vessels flagged, operated or owned by Russia from docking at their ports.

Nayara, in which trader Trafigura and Russia's VTB Bank also has a stake, operates a 400,000 barrels per day refinery at Vadinar in western Gujarat state, and previously bought Urals in March 2021, according to Refinitiv data.

Marshall Island-flagged Freud, managed by TMS Tanker Ltd and carrying about 1.14 million barrels of Urals, will reach Vadinar on March 30, while Moskovsky Prospect loaded with 725,380 barrels is expected to arrive on April 17, Refinitiv flow shows.

No response was available from Svocomflot, while Trafigura and Nayara did not comment on the deal citing confidentiality.

"Like any other refinery, Nayara Energy has ongoing crude sourcing agreements to optimise its crude basket with an aim to achieve the best option for our refinery," it said.

Trafigura said it would comply with its legal obligation under term agreements signed prior to the war in Ukraine.

India rarely bought Russian oil in the past due to high freight costs.

Oil Minister Hardeep Singh Puri last week said India was in talks with Russian authorities to buy oil and was evaluating issues related to insurance, freight and payment.

India has called for an end to violence in Ukraine but refrained from outright condemnation of Russia, with which it has long-standing political and security ties.

Earlier this month, Hindustan Petroleum also bought Russian oil on a delivered basis at deep discounts through tenders.

While state-run refiners have bought Russian oil at deep discounts through tenders, for Nayara the discount on oil purchases is "not much", the sources said.

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Published 23 March 2022, 15:48 IST

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