India top refiner resumes trade on Russian Sovcomflot ships

Indian Oil Corp. resumed buying Russian crude oil delivered on a tanker owned by Sovcomflot PJSC this week, paving the way for a restoration of oil flows between Russia and India, after tightened US penalties had disrupted shipments. 

Suezmax tanker Vladimir Tikhonov discharged around 1 million barrels of Russian flagship Urals crude at Paradip port, where Indian Oil has a refinery, on Thursday, according to Bloomberg ship-tracking data. That’s the first tanker belonging to the Russian state tanker giant to deliver crude after another smaller vessel, SCF Baltica, offloaded fuel oil last week off Sikka, in the state of Gujarat. 

Indian Oil didn’t reply to an email seeking comment.

The acceptance of Sovcomflot tanker by the country’s largest refiner carries significance as it could embolden other smaller refiners to also use the Sovcomflot vessels for their oil purchases from Russia. 

Refiners in India, who have emerged as key buyers of Russian crude since Moscow’s invasion of Ukraine, had decided in March against receiving oil hauled on all tankers owned by Sovcomflot, after the US in February imposed stricter sanctions in a joint effort with Group of Seven nations to thwart Russia’s attempts to evade a price cap on crude exports.

That brought in a number of fresh names — a new one popping up after another loses prominence — in terms of traders and marketers handling the Russian crude trade with India. That’s formed an ever-evolving network of transporters and kept some of the cargoes flowing from Moscow.

Indian refiners, however, started feeling more at ease with purchasing Russian crude, even on Sovcomflot tankers, since US officials visited New Delhi earlier last month and said that they never expected the country to stop buying Russian oil, as it was in Washington’s interest to keep energy flowing to prevent supply shocks.

India’s daily crude imports from Russia climbed to more than 1.9 million barrels in April, the highest since July, according to data intelligence firm Kpler. Deliveries of Urals and Sokol have risen sharply on-month, the data showed. Comparatively, refiners cut shipments from Iraq and Saudi Arabia, India’s second and third largest oil suppliers. 

Meanwhile, at least five Sovcomflot tankers carrying Urals are signaling India as their destination this month, with tanker Suvorovsky Prospect anchored off the country’s west coast, according to Bloomberg ship tracking data.