Payments cannot be done in US dollars and alternatives are proving difficult it seems:
India’s Russian oil imports declined to an 11-month low in December as the country was unable to take delivery of any cargo of the Sokol grade crude, even as the import volumes of the Urals crude—the mainstay of India’s oil imports from Russia—remained robust in the last month of 2023, shows an analysis of latest shipping data provided by commodity market analytics firm Kpler.
From the article:
Two of the six tankers are now showing Chinese ports as their destinations, indicating that these cargoes could finally be consumed by Chinese refiners instead.
So there are still buyers out there for Russian oil.
“Interestingly, the volume of Urals that Indian refiners are buying is roughly the same as it was before, around 1.1-1.15 million bpd. The big change this month was the absolute absence of Sokol imports. Indian refineries bought an average of 140,000 bpd of Sokol this year…December 2023 marks the first and only month in 2023 that India didn’t buy (any Sokol crude),” said Viktor Katona, Kpler’s Lead Crude Analyst.
Is the Sokel crude different than the Ural crude. Could this be a refinery problem?
Let’s find other news sources.
https://www.bloomberg.com/news/articles/2024-01-04/russian-oil-losing-competitive-edge-in-india-as-prices-rise
Russian Oil Losing Competitive Edge in India as Prices Rise
Iraqi crude was cheaper than discounted Russian barrels
India says low discounts not payment issues hit imports
*India’s crude oil imports from Russia in November were the costliest in a year, government data show, reflecting lowering discounts on the fuel.*emphasized text
https://www.reuters.com/markets/commodities/indias-russian-oil-imports-drop-pricing-not-due-payment-woes-2024-01-03/
India’s Russian oil imports drop on pricing, not due to payment woes
India’s December Russian oil imports fell to an 11-month low as five ships loaded with light sweet Sokol grade headed to other locations after the U.S. imposed sanctions on some vessels and shippers for not complying with the G7-fixed $60 per barrel price caps for oil at Russian ports.
Seems to be a pricing issue not a payment issue. Russia will have to sell more oil to maintain same level of revenue.
From the article it sounds like payments are one of the problems.
According to trade sources, Sakhalin-1 LLC—an arm of Russian oil major Rosneft—which supplies Sokol crude to IOC, has not been able to secure an account in the United Arab Emirates (UAE) in order to accept payments in dirhams.
Given that not all Indian banks are being able to process payments in dollars for Russian crude, particularly in cases where it might be difficult to prove that the oil was bought at a price compliant with the G7 price cap, India’s public sector refiners are now opting to pay in UAE dirhams for such cargoes.
Russia and India planned to do business in rupees and roubles:
Not surprisingly, it didn’t go well:
Reuters and Bloomberg article say not. So one can pick their media source.
India’s Russian oil imports drop on pricing, not due to payment woes
I do not need to write the transcription.
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Reuters said that the Indian Oil Minister denied there was a payment problem. Which means enough people were talking about it he was forced to deny it.