Russian Crude Oil: Russia gave huge discount on crude oil, even then why India got only two dollars per barrel – why india saved just $2 per barrel even after russia’s deep discounts
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Why are you not getting the benefit of the discount?
According to media reports, Moscow is facing Western sanctions because of the Ukraine war. Russian oil shipments have increased significantly. That’s why they are not getting that much benefit of the rebate on the price of oil. However, there is a possibility that the discount on oil may increase further. Earlier, Goldman Sachs had said on February 10 that Indian refiners have started buying discounted Russian crude. India has ensured that as one of the largest importers of crude oil, it will buy oil from wherever it gets a good deal. Trade data analysis shows that the effective discount on Russian crude during April-December varies significantly from month to month. The lowest discount was $0.6 a barrel in April and the highest was $15.1 a barrel in May, the average price of crude oil imported from the rest of the world in those months.
Less discount than expected
Explain that the average price of imported crude oil for April-December was $ 99.2 per barrel. If Russian barrels are excluded, the average price rises marginally to $101.2 per bbl. The total value of India’s oil imports for the period under consideration stood at $126.51 billion. The analysis shows that if Indian refiners had paid the average price paid for Russian oil for crude from other suppliers, the oil import bill would have been around $129 billion, or about 2 per cent higher. The value of oil imports from Russia for this period was approximately $22 billion. The average price of Russian crude oil for India in April-December was $90.9 per barrel. This price is less than the price of non-Russian crude oil by about $ 10.3. However, this exemption is much less than what has been claimed in the reports of India and other countries.
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The price of crude oil depends on the grade
Russian crude accounted for about 19 per cent of India’s April-December total oil imports of 173.93 million tonnes or 1.27 billion barrels. India became the second largest supplier after Iraq in April-December. Explain that the government releases commodity-wise and country-wise trade data with a lag. The price of crude oil depends on the grade of the oil and their prices can vary to a great extent.
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