According to data and six trade sources, three trading houses have become the main sellers of Russian oil to India as many smaller players have abandoned the market due to high financing costs in Russia and lack of access to Western funds.
The move reverses a trend in which dozens of little-known trading companies are flooding the oil trading market between Russia and major buyers China, India and Turkey, lured by the prospect of higher commissions for help Russian producers circumvent sanctions imposed by Western countries.
India became the biggest buyer of Russian seaborne crude after Moscow's invasion of Ukraine in 2022, with purchases near records of 1.8 million to 2 million barrels per day, or more than a third of its crude imports.
Recent trade concentration has allowed Russia to sell record volumes of oil to India at the lowest discounts since 2022, although its oil remains cheaper than competing US and Middle Eastern grades, according to six traders and data.
The dominance of a small number of players makes them easier to track and increases the trade's exposure to further sanctions if the West increases pressure on the Kremlin, traders said.
Washington and Brussels imposed various sanctions on traders, banks and shipowners to reduce the Kremlin's revenues, but new companies quickly replaced the sanctioned entities.
This situation has changed in recent months.
Most Russian crude is now sold by companies such as Litasco Middle East, the Dubai-based trading arm of Russian oil company Lukoil, and Dubai-based Hinera Trading and Black Pearl Energy Trading, according to customs and data maritime transport consulted by Reuters. This development had not been previously reported.
Lukoil did not respond to a request for comment. Reuters was unable to locate contact details for Hinera and Black Pearl Energy. Both companies ship large volumes of oil to India from Russia's largest oil producer, Rosneft, according to trade sources.
Rosneft did not respond to a request for comment.
Last year, Indian companies were receiving offers for Russian oil from at least ten intermediaries a month, three of the six sources said. The six sources requested anonymity because they were not authorized to speak to the media.
Some of the sources work for Indian refiners and others for Russian oil traders.
Traders such as Dubai-based Starex Trading and Pontus Trading, which were major suppliers of Russian oil to India last year, are no longer offering cargoes, according to customs records compiled by a trade data provider. trade and the three commercial sources.
Starex Trading and Pontus did not respond to requests for comment.
India's state-owned refiners, such as Indian Oil Corp, rely on spot purchases, unlike private refiners Reliance Industries and Nayara Energy, part-owned by Rosneft, which have annual deals to import Russian oil, the sources said. .
HIGH RATES
Russian oil middlemen rely on financing from Russian banks amid Western sanctions and had to abandon trading after Russia raised interest rates to 21% at the end of October, the highest rate since 2003, said two of the six traders.
As Russian oil flows to India became established, producers began asking middlemen for prepayments of up to two weeks before loading a cargo, the two sources said.
In 2022 and 2023, by comparison, payments were made weeks after loading, as Russian companies were desperate to place barrels in Asia after sanctions closed European Union markets, the two sources said .
Fewer middlemen have given Russian producers greater pricing power, the six traders said.
Discounts on Russia's benchmark oil, Urals, have narrowed in recent months to $3 to $4 per barrel on an ex-ship delivery (DES) basis to Indian ports, compared to $8 per barrel. last year, according to Reuters calculations based on market data.
Russian barrels remain attractive to Indian buyers because they are $3 to $3.5 cheaper than competing grades from the United States and the Middle East, the six traders said.
Despite rising prices, volumes of Russian seaborne oil to India remain near record highs, outpacing shipments to China.
Although the concentration of trade potentially makes it easier for the West to reduce Russian oil sales with additional sanctions, Russian companies could again resort to the strategy of using multiple intermediaries if necessary, said the one of the traders.
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