India's public sector oil companies have bought 5 million tonnes of Russian crude oil at deeply discounted prices in the wake of the Ukraine conflict.
The deals will help India to keep domestic fuel prices in check at a time when international prices of crude have skyrocketed.
While Indian Oil Corporation has bought 3 million tonnes of Urals crude from Russia at a discount of $20 to $25 per barrel, Hindustan Petroleum Corp Ltd has struck a deal for the purchase of 2 million barrels of the same crude, according to a Reuters report.
US-led western sanctions have led to a sharp drop in the demand for Russia’s oil leading to the discount.
However, some European companies such as Germany are still buying Russian oil and gas as they are critically dependent on these supplies. The UK has reduced its purchases of Russian oil.
The USA is itself, the largest producer of oil and has, therefore, banned the purchase of Russian oil as it was buying it only in small quantities.
Arranging for ships and insurance for picking up Russian cargoes has also become a problem due to the sanctions, but Moscow will help the Indian companies in transporting the crude, an oil company official said.
The purchases are being made at a time when the OPEC countries are refusing to increase output to feed the energy-hungry market and cool prices.
