MOSCOW, March 27 (Reuters) - India was the biggest buyer
of seaborne Urals oil in March and the country's demand for the
grade means Russia has to maintain high exports, two traders
said and Refinitiv Eikon data showed on Monday.
Refiners in India, which in the past rarely bought Russian
oil, because of high transport costs, have emerged as key oil
clients for Russia, snapping up crude rejected by the West since
the Ukraine conflict began in February 2022.
In March, India's purchases of Urals oil accounted for more
than 65% of total seaborne exports of Urals, Refinitiv data
showed. Traders said the rising demand from Indian refineries is
forcing Russia to support exports despite Moscow's pledge to cut
oil output.
Last week, Deputy Prime Minister Alexander Novak said Russia
was very close to achieving its target of cutting crude oil
output by 500,000 barrels per day (bpd) to around 9.5 million
bpd.
In April, Russia may continue to maintain high oil exports
to meet India's refiners needs, traders said. Seasonal
maintenance on Russia oil refiners will allow the state to do
so.
Russian Urals oil loadings in March are expected to increase
by 4% on February.
"India is very actively buying Russian oil, it is profitable
compared to alternatives. They ask for serious volumes and we
need to deliver," said a trader in the Russian oil market.
Demand from Indian buyers supported prices for Urals oil,
traders said. The discount for Urals has declined by about $8
per barrel compared with mid-January, Novak said last week.
Traders said the rise in Urals oil loadings has tightened
the tanker market, which is already facing constraints because
of sanctions.
This is why shippers are using Suezmax tankers, designed for
the transport of 130,000-180,000 tonnes, to ship 100,000-tonne
cargoes from the Baltic ports.
At least 11 tankers from the March loading plan that loaded
Urals cargoes from Baltic ports were Suezmax size vessels,
according to the traders.
The cost of freight for Suezmax and Aframax vessels remains
the same due to a shortage of Aframax tankers, which typically
carry around 70,000 to 120,000 tonnes.
The cost of Urals oil transport from Baltic ports to India
rose this week to $8.5-8.7 million, two traders said. The
freight cost for this route was estimated at $7.9-8 million last
week.
(Editing by Jane Merriman)
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