It’s official: Reliance Industries has stopped taking Russian crude at its Jamnagar export refinery to avoid taking US sanctions. The operator of the world’s largest refining complex halted imports for its export-only Jamnagar refinery effective yesterday (20 November), the Economic Times reports. Five Indian refiners, including Reliance, had earlier indicated they would stop taking Russian crude after 21 November.

Look for an increase in Indian appetite for MENA crude as other refiners follow Reliance’s lead.

The strategy: A clean split. Reliance is effectively bifurcating its crude diet to protect its export markets in Europe and the United States while keeping cheaper Russian oil flowing for domestic use.

  • For exports: From 1 December, the SEZ refinery — which supplies Western markets — will run exclusively on non-Russian crude to comply with EU and US restrictions.
  • For India: Any Russian cargoes arriving on or after yesterday will be diverted to a legally-onshore facility that serves the local market, Mint notes.

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IN CONTEXT- The US Treasury’s wind-down period for transactions involving Rosneft and Lukoil ends today. Indian Oil Corporation will continue lifting only non-sanctioned Russian grades, while Roseneft-backed Nayara Energy, which relies entirely on Russian supply, is continuing with its purchases.

MENA crude will become an even more critical component of India’s oil diet going forward. Look for Indian refineries to up imports from Saudi Aramco next month to help compensate for an expected 1.2 mm bbl / d decline in Russian supplies, the Hindu Business Line reports, citing what it says are industry sources.

India’s refiners are also ramping up bookings for oil tankers to carry crude to India from MENA, including from Saudi Arabia, Kuwait, Iraq, and the UAE, Bloomberg reports. About a dozen tankers were chartered by refiners this week versus just four in October. Recent bookings led to a jump in freight rates, with the daily cost of hiring an oil supertanker from MENA to Asia currently approaching a five-year peak.

REMEMBER- Saudi Arabia is hungry for Asian business as it looks to keep a floor under the price of oil amid a slowdown in demand, cutting its official selling prices to Asia for December.

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