Premiums for Russian Ural crude delivered to India have fallen sharply in recent weeks, as Indian refiners curb purchases in the face of declining refining margins, according to several traders quoted by Reuters.
Russian Urals crude destined for Indian ports for June deliveries is now trading at a premium of between $2 and $4 per barrel above Brent, compared to $6 to $7 for May shipments.
This decline reflects the slowdown in demand from Indian refineries, which are seeing their profitability decrease amid volatile energy markets and global economic uncertainties.
Since the start of the war in Ukraine, India has become one of the main buyers of Russian oil, taking advantage of discounts offered by Russia after Western sanctions targeting Moscow's energy exports.
But the situation is now changing with the weakening of refining margins, which reduces the economic incentive for some large-scale purchases of Russian crude. Indian refiners are therefore adjusting their supplies to limit costs and preserve their profitability.
Ural oil, Russia's main crude export, remains an important source of supply for Asian refineries, particularly due to its competitive prices compared to other international crude grades.
This development comes as oil markets remain under pressure due to geopolitical tensions in the Middle East, concerns about global growth and persistent fluctuations in energy demand.
Traders believe that the future development of Indian purchases will largely depend on refining margins in the coming months as well as international oil market conditions.
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