Core Insights - Oil prices remained stable amid bearish market sentiment following a U.S.-China trade truce, with Brent crude at $65.07/bbl and WTI at $60.92/bbl, reflecting slight declines from the previous week [1] Group 1: U.S. Sanctions and Indian Refiners - The Trump administration imposed new sanctions on Russian oil and gas companies Rosneft and Lukoil, coinciding with similar actions from the UK [2] - Indian refiners are increasingly avoiding Russian oil, opting for more expensive U.S. and Middle Eastern alternatives to mitigate risks associated with U.S. sanctions [2][3] - Over the past three years, India has benefited from discounted Russian crude, which was typically $8-$12 per barrel cheaper than Middle Eastern benchmarks, with imports peaking at approximately 1.75 million barrels per day [3] Group 2: Impact on Oil Imports and Prices - The share of Russian oil in India's import basket has decreased to 34% this year from 36% in the previous two years, while U.S. crude imports surged to 575,000 barrels per day in October, the highest in three years [4] - The sanctions have led to increased caution among banks regarding settlement channels, raising transaction risks for Indian refiners [4] - Following the sanctions, crude oil prices have risen sharply, raising concerns about supply tightness and inflation, which could negatively affect India's fiscal deficit and import bills [4] Group 3: Future Oil Price Trajectory - Commodity analysts at Standard Chartered suggest that the future trajectory of oil prices will depend on the volume of Russian oil removed from the market due to sanctions, with Rosneft and Lukoil having exported 1.9 million barrels per day over the past year [5]
Indian Refiners Pivot Away From Russian Oil