India to Ramp Up Russian Oil Purchases - Reports

MOSCOW (Sputnik) - India's state oil companies plan to buy as much Russian oil as possible, changing their procurement strategy from bids to longer term contracts, Indian newspaper Economic Times reported on Tuesday, citing sources familiar with the situation.

According to the sources, Indian refineries expect the availability of Russian oil to increase in the near future because the conflict in Ukraine is unlikely to end soon and Russian oil will face new restrictions in Europe.

The state refineries in India have already bought more than 15 million barrels of Russian oil using normal banking channels and paying in dollars since the beginning of the special operation in Ukraine, the report said.

According to the newspaper, oil supplies from Russia account for only a small share of India's total crude imports due to the high freight cost. At the same time, even with recent increases in supplies, oil imports from Russia are still less than 1% because Indian companies have been buying Russian oil only if the cost of delivery is included in the final price.

On February 24, Russia launched a military operation in Ukraine after the breakaway republics of Donetsk and Lugansk appealed for help in defending themselves against Ukrainian provocations. In response to Russia’s operation, Western countries have rolled out a comprehensive sanctions campaign against Moscow.

EU governments said last week the bloc was drafting proposals to ban Russian crude imports, although diplomats said Germany was not actively supporting a US-style immediate embargo.

Against this backdrop, Russian oil output has continued to slide in April, declining by 7.5% in the first half of the month from March, the Interfax news agency reported last week.