Posted on 10/18/2022 9:10:19 PM PDT by Berlin_Freeper
Two of the biggest refiners in India have stopped looking for spot Russian crude oil supply set to arrive after December 5, the day on which the EU embargo on Russian oil shipments enters into force, sources familiar with the Indian firms’ procurement plans told Bloomberg on Tuesday.
The two refiners are Indian Oil Corporation and Bharat Petroleum Corporation Limited (BPCL), according to the sources.
India, the world’s third-largest crude oil importer, has been importing large volumes of Russian oil after the Russian invasion of Ukraine due to the cheap supply with hefty discounts on the Russian grades compared to benchmarks.
Now IndianOil and BPCL, two of the biggest state-owned importers of Russian crude oil in India, are awaiting more clarity on the EU sanctions regime ahead of the December 5 deadline, including on the possibility of secondary sanctions on buyers of Russian crude.
The EU is set to impose as of early December an embargo on imports of Russian crude by sea and ban all maritime transportation services to all buyers unless the Russian oil is priced at or below a certain price cap, yet to be determined. Russia has repeatedly said that it would not export its oil to any country that will have joined the G7 and U.S.-led proposal for a price cap.
(Excerpt) Read more at oilprice.com ...
So it's not about sanctions. It's about pricing.
If India can achieve this to what is economically acceptable for them, this will give them more leverage in dealing with Russia. It will also mean the rest of the oil refinery industry is on its way to adjusting as well. Less harmful if not good for everyone else, bad for Russia using oil as a instrument of politics.
So we are setting up a “price cap”? Lol. Let’s go Brandon!
Not going to help things in Germany or Europe though...
“Germany’s Apokalypse Now”
https://www.tabletmag.com/sections/news/articles/germany-apokalypse-now
Give a big enough discount and Russian oil will find its way to refiners around the world. Russian discounted oil is the main reason gasoline have not soared even higher and why OPEC absolutely refused to pump more oil.
Oil is fungible. Russian oil will continue to flow to China.
China could benefit from a weakened (or destroyed) Russia with the West beating at Russia’s front door.
Russian oil is not completely fungible now. Transport is already inadequate, and the “price caps” actually are restrictions on transport the Russians can access.
Russian oil will continue to flow to China, but given that Russia is already having to give discounts, price and volume are going to be “interesting”...
Flow how... boat?
The Indians were buying at a $30/barrel discount to Brent Sea Crude.
If they are not being offered it at this discounted rate, they probably do not want to buy it.
The price of a FUNGIBLE COMMODITY is a function of the freight to get it from the seller to the buyer in relation to other suppliers of the same product.
Also, there are refineries that are more adept at breaking down high sulfur crude and others that can only breakdown sweet crude.
If there is more demand in the market for diesel or heating oil in the winter there may be more demand for high sulfur crude that comes from places like Venezuela.
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