India which had already emerged as a large customer of oil from Russia after the invasion of Ukraine is moving to resume the flow of imports after a brief pause. Both Reuters and Bloomberg are tracking tankers from Sovcomflot’s fleet managed out of the UAE bound for India while Bloomberg is reporting India is also providing marine insurance access to support Russia in transporting the oil products.
The U.S. began in late 2023 increasing the sanctions against tankers and ultimately directly listed Russian tanker owner Sovcomflot in February 2024 as part of the efforts to enforce the oil price cap imposed by the G7 nations. Both Reuters and Bloomberg cite sources in the U.S. government that said the goal was not to totally disrupt the oil market and that they had not directly asked India to suspend Russian oil imports. However, tankers linked to the Russian trade appeared to be delayed or turned away from India, and after Sovcomflot was added to the latest efforts reports said Indian refineries were rethinking their use of Russian tankers.
Bloomberg calculates that India is importing 1.72 million barrels a day in April, the highest level in nine months. In both reports, the news outlets assert that Russia seeks to control much of the oil shipments to provide freight income.
India’s Directorate General of Shipping’s website Bloomberg reports now shows that four Russian firms have been listed for marine insurance. Three of the firms, VSK, Sogaz, and Alfastrakhovanie, are listed with approval till February 2025 while Ingrosstrakh was extended to March 2029.
Access to insurance was been one of the critical issues for the oil shipments with Russia avoiding Western sources due to the sanctions. Data calculated by Bloomberg says in March less than a quarter of Russian shipments were insured through London P&I Clubs, the world’s leader for ocean-going cargoes. In a separate report filed today by Bloomberg, they are detailing that a shadow fleet tanker transporting Russian oil presented fake or expired insurance documents to the Danish authorities after the vessel was in a minor accident.
India’s major refineries are reported to now be rethinking their position on the use of Russian tankers. Both Bloomberg and Reuters are tracking a tanker from the Sovcomflot fleet sailing currently to India that is not part of the U.S. sanctions. The Vladimir Tikhonov (162,000 dwt) registered in Gabon, is expected to arrive next week, with Bloomberg reporting the tanker will be offloading to the state-owned Indian Oil Company. It is following the SCF Baltica (117,000 dwt) also registered in Gabon that already reached India with 90,000 metric tons of fuel oil for Reliance Industries, reports Reuters.
After the U.S. listed 14 Sovcomflot tankers and the company following the listing of other tankers managed from Dubai, Sovcomflot said it was making the trade increasingly difficult. The company however reported a strong profit in 2023 and used the money to repay loans.
Analysts believe India is taking these additional steps to ease the pressures and ensure the continued flow of Russian oil imports.
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