Indian Demand for Russian Urals Crude Grows Amid Supply Shifts

Key Highlights

• Price Trends: Base Oil (N150) is at ₹69/L in Delhi, while Urals crude for India is discounted by $2.80–$3.00 per barrel.
• Supply Shifts: Declining Russian crude shipments to Turkey have redirected more Urals crude to Indian refiners.
• Market News: Oil prices fell below $71/barrel as OPEC+ announced production hikes, while trade tensions added to volatility.
• Expert Outlook: India's Urals crude imports will likely remain strong despite geopolitical risks and price fluctuations.

Petroleum Price Trends & Market Movement

• Base Oil (N150) is priced at ₹69 per litre in Delhi, while Base Oil (SN150) is available at ₹61 per litre in Kandla. 
• Fuel Oil (Virgin 180cST Furnace Oil) in Mumbai is priced at ₹47.5 per kg, whereas the 180cST Furnace Oil variant is slightly higher at ₹49 per kg. 
• Low Sulphur Heavy Stock (LSHS) Fuel Oil is listed in Jamnagar. In Bhiwadi, LubriEdge Hydraulic Oil (Hydraulic Oil 68) is priced at ₹87 per litre. 
• LubriEdge Gear Oil (Gear Oil 150) is available at ₹119 per litre in buckets and ₹115 per litre in barrels. 
• LubriEdge Rust Preventive Oil (Water Displacing Type - WDM) is consistently priced at ₹122 per litre. 
• Metal Working Fluids, including Soluble Cutting Oil, are available at ₹112 per litre, while Quenching Oil 32 is priced at ₹134 per litre.

Supply & Demand Shifts in the Crude Oil Market

• The Indian crude oil market has witnessed a shift in supply dynamics as Russian Urals crude shipments to Turkey hit a two-year low, prompting an increase in cargo redirection to India. 
• February loadings from Russia’s western ports saw a decline in Turkish-bound shipments after Turkey’s largest oil refiner, Tupras, halted purchases of Russian oil. This led to a surge in Urals crude availability for Indian refiners, who remain the largest importers of Russian seaborne oil.
• Urals crude cargoes destined for Indian ports in March were priced at a discount of $2.80 to $3.00 per barrel to dated Brent on a delivered ex-ship (DES) basis, slightly lower than the $2.50-$2.90 per barrel discount seen for February and early March deliveries. 
• Despite the increase in shipments, Urals crude prices have not dropped significantly due to persistent demand from Indian refiners. Market participants attribute this stability to the shrinking spot market following Rosneft's long-term supply agreement with Reliance Industries, which secured nearly 500,000 barrels per day (bpd) for the Indian refiner—the largest energy deal between the two countries to date.
• In March, oil loadings from Russia’s western ports are expected to decline compared to February as domestic refineries resume operations after maintenance. However, ongoing drone strikes on Russian oil infrastructure could disrupt expected supply flows. The total export and transit volume of Urals, KEBCO, and Siberian Light crude from Russian ports (Primorsk, Ust-Luga, and Novorossiisk) is projected to be around 1.8–1.85 million bpd in March.

Petroleum News: Key Industry Developments & Market News

• Oil prices declined for a third consecutive session on Wednesday as major producers planned to raise output in April, coupled with concerns over US tariffs.
• Brent crude oil prices slipped below $70 per barrel as OPEC+ announced plans to ramp up supply. Analysts are assessing the reasons behind the decline in crude prices and the potential impact of increasing production levels.
• Crude oil futures continued to struggle as OPEC+ confirmed production hikes, while trade tensions and tariffs weighed on market sentiment. The uncertainty surrounding global trade policies further impacted investor confidence.
• Crude oil prices settled 0.48% lower at ₹5,960 after OPEC+ confirmed its planned output increase for April. The announcement, along with new US tariffs, put additional pressure on oil prices.
• Oil prices fell below $71 per barrel on the morning of March 5 due to OPEC+'s decision to gradually increase production. Uncertainties in US foreign trade policy have also contributed to ongoing volatility in the oil market. Oil prices continued to decline on Wednesday as plans to increase production in April, along with concerns over US tariffs on Canadian exports, added to market uncertainties.
• The decline in the US dollar and lower crude oil prices may provide a boost to India's market outlook, according to Sandeep Tandon, CIO of Quant MF. He emphasized the significance of market corrections and their occurrence even in bullish conditions.

Expert Insights on Future Petroleum Market Trends

• It is expected that India's Urals crude imports will remain robust in the short term, especially as Turkish demand declines. While supply to India has increased, price volatility could arise due to geopolitical uncertainties, including Russian infrastructure disruptions. 
• Furthermore, with long-term contracts like Rosneft-Reliance in play, India's dependence on Urals crude is likely to persist, sustaining demand even if global oil markets tighten.