Indian refiners likely to face headwinds from new EU sanctions against Russia: ICRA

New Delhi [India], July 30 (ANI): Indian refiners are likely to be impacted by the European Union (EU) sanctions against Russia, as revealed in a recent report by ICRA.

The EU's 18th sanctions package, implemented on July 18 against Russia, includes an import ban on all refined products made from Russian crude oil originating from third countries, with exceptions for Canada, Norway, the US, the UK, and Switzerland.

ICRA believes that this move is expected to significantly impact Indian refiners, who exported approximately USD 14.3 billion worth of petroleum products to the EU in fiscal year 2025.

India has emerged as a major refiner of Russian crude, taking advantage of discounted prices that were previously in the range of USD 10-16/bbl. While these discounts have narrowed to around USD 2.5-4/bbl, the new price cap and other measures could potentially widen them again.

Additionally, India's exports of petroleum products to the EU have surged in the past three years due to reduced Russian supplies to Europe, with annual exports reaching approximately USD 14-15 billion during this period.

The new EU sanctions package is poised to restrict market access for Indian refiners, as well as those in Turkey and the UAE, who have been processing Russian crude and supplying refined products to Europe.

In addition to the import ban, the EU has lowered the price cap for crude oil from USD 60 bbl to USD 47.6 bbl to align with current global oil prices, and has implemented a dynamic mechanism for future price cap reviews.

These price caps prevent EU operators from providing transport or insurance services for Russian oil traded above the set limit.

The sanctions also expanded the list of sanctioned vessels by 105, bringing the total to 444, and these vessels are now subject to port access and maritime transport service bans. Indian refiners have already ceased doing business with sanctioned entities and traders.

Despite Russian oil exports accounting for about 7 per cent of global liquid consumption, which could typically lead to a surge in oil prices if supplies are cut off, crude oil prices have remained largely stable, indicating an expectation of minimal disruption to supplies. (ANI)