India's Reliance turns to Middle East and US crude as Russian sanctions bite

India’s Reliance Industries Ltd. has significantly increased its purchases of crude oil from the Middle East and the United States following Washington’s decision to sanction two major Russian producers, raising concerns over possible disruptions in global oil supplies.

According to traders familiar with the matter, cited by Bloomberg, the private refiner acquired several crude grades, including Saudi Arabia’s Khafji, Iraq’s Basrah Medium, and Qatar’s Al-Shaheen, as well as some US West Texas Intermediate (WTI) crude.

The sources, who requested anonymity as they are not authorised to speak to the media, said the deliveries are expected to arrive between December and January.

Reliance, which has been India’s largest buyer of Russian oil by volume this year, sources most of its Russian crude through a long-term supply contract with Rosneft PJSC — one of the companies targeted by the new US sanctions. Although the refiner routinely purchases Middle Eastern grades, traders noted that its recent activity in the market, including deals made earlier this week before the sanctions were imposed, has been unusually high.

In total, Reliance has purchased at least 10 million barrels of crude from the spot market this month, with most of the cargoes coming from the Middle East and the majority of them secured after the US penalties were announced, the traders said.

Other Indian refiners are also actively seeking spot cargoes, particularly from suppliers in the Middle East, the United States, and Brazil, according to traders. On Thursday, prices for grades such as Oman crude strengthened, while prompt timespreads for the region’s benchmark Dubai grade widened. Meanwhile, global benchmark Brent crude rose by more than 5%.

Industry observers expect Russian oil shipments to India to decline sharply following the sanctions on Rosneft and Lukoil PJSC, except for those destined for Rosneft-backed Nayara Energy Ltd. Some Chinese buyers have also temporarily halted their purchases as they evaluate the implications of the new US restrictions.