IOC buys Russian crude at deep discount

Indian Oil Corporation (IOC) has bought as much as 3 million barrels of crude oil that Russia had offered at a steep discount to prevailing international rates. According to agency report, the purchase, made through a trader, is the first since Russia's February 24 invasion of Ukraine that brought international pressure for isolating the Russian President Vladimir Putin's administration.  IOC bought Urals crude for May delivery at a discount of $20-25 a barrel to dated Brent. As the US and other western nations slapped sanctions on Moscow, Russia has begun offering oil and other commodities at discounted prices to India and other large importers.

IOC purchased modified terms that require the seller to deliver it to the Indian coast to avoid any complications that sanctions may lead to in arranging shipping and insurance. Unlike the sanctions the US imposed on Iran over its controversial nuclear programme, oil and energy trade with Russia has not been banned. This means international payment systems are available to settle any purchase made from Russia. India, which imports 85 per cent of its oil needs, is looking to cut spiralling energy bills through purchases from anywhere it can get at cheaper rates.