NEW DELHI: India purchased almost 60% of all Russian Ural oil exports in June amid a strong demand from refiners even as China's consumption dropped to just 7%, Reuters reported quoting trading sources.Urals is Russia's main export grade from its European ports and represents about a half of total Russian oil exports.
The country, subject to severe Western sanctions over its actions in Ukraine, also exports oil from its Pacific ports, its Arctic ports and via a direct pipeline to China.Indian refiners are benefitting from good margins due to attractive prices offered by Russia for Urals.Russia has heavily relied on countries like India, China, Turkey and Bulgaria for oil sales since the imposition of sanctions following its invasion of Ukraine.Data showed that Russian oil production cuts and higher refinery runs hit supplies of Urals to the Chinese and Turkish markets in June, while India retained its top share in purchases.On Monday, Russia pledged to make an additional 500,000 barrel per day output and export cuts in August.Urals oil shipments to India in June stood at about 60% of total Urals shipments, in line with May, according to Reuters calculations based on Refinitiv data and sources.
Overall India's imports of Russian oil hit a record 2.2 million barrels a day in June, rising for a 10th month in a row and exceeding the combined shipments from the next two largest providers Saudi Arabia and Iraq, according to Kpler data.In May too, India had imported a record 1.95 million barrels per day from Russia, accounting for about 40% of the total supply of crude oil to the country.Demand for Urals in India was supported by attractive pricing for the Russian barrels compared to competing Middle Eastern grades and lower freight rates from Russian ports.According to Refinitiv data available to date, shipments of Urals oil to China from Russian ports and ship-to-ship (STS) locations fell to just 7% of Urals seaborne exports, down from 13% in May.
The fall in June-loading Urals supplies to China was due to weaker demand from Chinese independent refiners that held back from buying due to a shortage of crude import quotas.'Indian refiners begin payments in Chinese yuan'On Monday, reports siad that Indian refiners have started paying for certain oil imports from Russia in Chinese yuan.This move comes as Western sanctions on Moscow and its customers have prompted them to seek alternatives to the dollar for settling payments.Traditionally, the US dollar has served as the main global oil currency, including for India's purchases.
But, since the invasion of Ukraine, Chinese yuan is increasingly playing a significant role in Russia's financial system because Moscow has been excluded from the dollar and euro financial networks by international sanctions.According to three sources familiar with the matter, Indian Oil Corp, the largest purchaser of Russian crude oil in India, became the first state refiner in June to make yuan payments for certain Russian purchases, the Reuters reported on Monday."Some refiners are paying in other currencies like yuan if banks are not willing to settle trade in dollars," an Indian government source told Reuters.(With inputs from Reuters)