Russia boosts Urals oil flow to India

MOSCOW, May 10, (RTRS): Russia has steeply raised Urals oil supplies to India, taking market share from OPEC countries that are cutting production as part of a global pact to prop up prices, traders said and shipping reports showed on Wednesday.

Historically, Russian crude oil exports to India did not exceed 500,000 tonnes per year, but since the start of 2017 supplies have surpassed 1 million tonnes and are expected to rise further, according to the traders and reports.

India’s main crude suppliers, Saudi Arabia and Iraq, cut exports to India this year due to production curbs under the agreement between OPEC and other leading oil producers.

Iran, also a major supplier to India, is decreasing shipments due to a row over a gas field.

State oil giant Saudi Aramco will reduce oil deliveries to Asia by about 7 million barrels in June, including by 3 million barrels for India, as it consumes more crude domestically while its production remains curtailed by the OPEC pact.

“Large Urals flows to India have been one of the main new trends for Russian oil exports this year, and it was clearly triggered by OPEC cuts amid rising demand,” said a trader at a trading desk of one oil major.

A favourable Brent-Dubai spread, very thin since February, gives India access to a variety of Brent-linked grades, one of which is Urals.

Indian Oil Corp bought at least 4 million barrels of Urals crude for June delivery in its spot tender from Litasco and Trafigura, traders said.

Three cargoes of 1 million barrels each loading from Novorossiisk will be supplied by Litasco, while Trafigura will supply 1 million barrels of Urals, they added.