Asia's appetite for Russian crude oil remains robust despite curbs

Indian refiners purchased record volumes of crude oil from Russia in December, even as Western powers rolled out a price cap aimed at further restricting the Kremlin's revenues and shrinking its war chest for funding its war against Ukraine.

- Luke Pachymuthu

Under the cap, Group of Seven (G-7) and European Union insurance and reinsurance companies that provide services for tankers carrying Russian crude oil, as well as institutions financing Russian crude transactions, will not be allowed to handle such cargoes unless the oil is bought at or below the US$60 price cap.

And shipping companies will not be allowed to provide tankers for the transport of Russian crude unless the oil is sold at or below that price cap.

Russian Energy Minister Nikolai Shulginov had said in 2022 that Moscow would respond to the price cap by shipping more oil to Asia. In December, President Vladimir Putin signed a decree that banned, for a period of five months from Feb 1, the supply of crude oil and oil products to nations that abide by the cap.

Before Russia invaded Ukraine at the end of last February, about half of its crude and petroleum product exports went to Europe, according to the International Energy Agency.

According to data from Refinitiv Oil Research, a unit of the London Stock Exchange Group, India imported more than five million tonnes of Russian crude for December, an all-time high, underpinning the South Asian country's voracious appetite for the heavily discounted oil.

India's total crude oil imports were at 20.23 million tonnes in December, close to a five-month high.

Ms Vandana Hari, founder of Vanda Insights, which analyses oil markets, said the bargain offered on Russian crude at the moment was just too good a deal for Indian refiners to pass up.