An aerial view shows a storage facility owned by Lukoil company at the Arctic port of Varandei
SINGAPORE/NEW DELHI (Reuters) – Russia is sending more crude oil produced in the Arctic region to China and India, and at steeper discounts, after Europe slammed its doors shut on Russian supplies last month, trade sources and data show.
Arctic grades Arco, Arco/Novy Port and Varandey do not normally head East but are now finding new homes further afield after the European Union, G7 nations and Australia introduced a price cap on Russian oil in December, on top of an EU embargo on Russian crude by sea. Sellers are selling the Russian crudes at bigger discounts as they absorb higher shipping costs.
“All these Arctic crudes usually go to the EU but now they have to go elsewhere,” a Singapore-based trader said.
Arctic crude exports to India have steadily increased since May, with a record 6.67 million barrels loaded in November and 4.1 million barrels in December, Refinitiv data showed. Most of the supplies were Arco and Arco/Novy Port produced at fields operated by Gazprom Neft.
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Update: China And India Are Buying Up Russia’s Arctic Oil (OilPrice.com)
WNU Editor: I am sure the discounts for this oil was an offer that both China and India could not refuse.