India to maintain status of Russia Urals crude top buyer in December
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India remains on top of the four remaining countries importing Russian Urals after the West banned the import of oil from Russia.
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A Russian tanker delivers oil to Norway in April, 2022 (Reuters)
India has maintained for the second month in a row its standing as Russia's top buyer of Ural crude oil, importing most of Russia's loading of the resource in December, traders have said, in addition to data from Refinitiv.
Russia's volumes, as well as India's shares of the exports, are expected to maintain an uptick for the coming months though there is a shorter loading plan for Russia's Western ports, analysts have been saying.
India accounted back in November for some 53% of Russia's total tanker shipments, which is the highest share recorded.
However, it is expected that this record will be broken this month, with India's shares projected to exceed 70% of total loadings in December.
India's imports of Urals crude are coming in at a steep discount in light of the West imposing on Russia a gas price cap, though reports say the price reduction is even lower than the $60 price cap.
On December 1, the European Union reached an agreement on setting a price cap on Russian oil at $60 per barrel, which went into effect on December 5. The Group of 7 and Australia also participated in the imposition of the price cap.
The cap will be reviewed every two months to remain at 5% below the International Energy Agency benchmark. The G7 nations and Australia also agreed that same day to set a $60 price ceiling on oil from Russia.
Starting from February 5, 2023, the European Union will be introducing a price cap for Russian refined products as well.
Western nations have been trying to find ways to reduce Russia's income from oil and gas exports since the start of the war in Ukraine.
In October, the EU introduced the eighth package of sanctions against Moscow, which included a legislative basis for setting a price cap for maritime shipments of Russian oil to third countries.
Russia had pledged to stop exporting its oil to countries that would apply price caps on its oil.
Meanwhile, those who violate the price cap on Russian oil exports will suffer consequences under the domestic law of the jurisdictions enforcing the quota, according to US Deputy Treasury Secretary Wally Adeyemo.
The Russian Urals had high demand in Europe, as they have a short trading cycle, cheap shipping, and high yields, with many countries picking the Urals over many others and making them their primary source of energy.
The Urals have fallen from grace, though, with the number of countries buying them projected to decline to just four.
Russia has now sent at least 2 million tons to India as key market players expect the monthly volume to sharply increase amid further inspection of more recent shipping data.
Moscow has struck gold, however, with the European Union excluding Bulgaria from its oil ban. That means that Bulgaria could become the second largest destination for Urals crude this month. It is expected that the EU member state will now be importing some 800,000 tonnes of Urals.
Despite what might be believed about China's imports of Russian oil, the loadings bound for the Asian giant remain low with only one cargo of around 140,000 tonnes sent as of December 16. It is expected that these numbers surge throughout the rest of the month.
Another country importing Urals is Turkey, taking in just one cargo in December of 140,000 tonnes.
