India remained top buyer of Russian Urals in Aug despite rising prices

Novorossiysk Commercial Sea Port PAO

05/09/2023 15:14

(This content was produced in Russia where the law restricts
coverage of Russian military operations in Ukraine.)
       MOSCOW, Sept 5 (Reuters) - India remained the main buyer
of Russian Urals oil loaded from the state's ports in August,
despite a record rise in prices for the grade, traders, LSEG
data and Reuters calculations showed.
     Indian refineries said in August that the Urals discount to
the dated Brent benchmark crude had narrowed too much, making
them cut purchases of the grade in September.
     Discounts for Urals oil loading in August narrowed to $5
per barrel and below on a DES (delivered ex ship) basis in
Indian ports - a record low since a European Union embargo on
Russia's oil.
    Along with the EU embargo, the G7, the European Union and
Australia imposed a $60 per barrel price cap last December on
sea-borne exports of Russian crude in retaliation for Russia's
war on Ukraine, which Moscow calls a special military operation.
    The increase in prices for the Russian grade was due to
Russia's pledge to cut oil exports in August by 500,000 barrels
per day (bpd) in cooperation with OPEC+ to balance oil markets.
Russia has pledged to cut oil exports by 300,000 bpd until
year-end.
     Russia's high dependence on India as its main oil buyer is
a rising concern for its oil companies this month, as an
expected rise in loadings from Primorsk, Ust-Luga and
Novorossiysk port in September coincides with a decrease in
demand in India amid seasonal maintenance.
     In August, Russian Urals oil deliveries to India accounted
for about 69% of the total shipments from Primorsk, Novorossiisk
and Ust-Luga, or about 74% of the shipments of Russian-origin
crude oil - in line with July, according to Reuters calculations
based on LSEG and traders' data.
     The share of Urals and Kazakhstan's KEBCO oil, which is
also shipped via Russian ports, to Turkey was little-changed in
August from July, at about 12% of the total volume, Reuters
calculations showed.
     The share of Urals seaborne exports to China rose to 7% in
August from 5% in July, according to Reuters calculations based
on the data. Deliveries of Urals to China in August increased
due to the shipment of 200,000 tonnes of the grade from Baltic
ports to China via the Northern Sea Route (NSR).
    NSR is a route currently only available for crude oil
supplies from Russia for four-to-five months a year due to the
tough ice situation.

 (Reporting by Reuters; Editing by Sharon Singleton)