By Admin 
Russia-Iran Cut Oil Prices: A major change is being seen in the global oil market amid the Ukraine war and western sanctions. On one hand, India has reduced the purchase of crude oil from Russia in view of American pressure and the risk of higher tariffs/sanctions, while China is taking advantage of this opportunity to increase its reserves by purchasing cheaper oil from both Russia and Iran.
According to energy research firm Rystad Energy, India’s oil import from Russia may decline by about 40% compared to January to about 6 lakh barrels per day. This has reduced competition for Russian oil in the Asian market, which is benefiting China.
China benefits from cheap oil
According to reports, Russia’s Urals grade oil is selling about $12 per barrel less than ICE Brent, while Iranian Light is also about $11 per barrel below the global benchmark. Due to this, Chinese refineries are getting crude oil at cheaper rates. Although China’s private refineries (teapot refiners) have limited capacity and import quotas set by the government, they are still trying to make the most of the available opportunities.
Imports at record level
Russian oil arrivals at China’s ports rose to 2.09 million barrels per day in the first 18 days of February, up 20% from January and almost double from December, according to vessel tracking data. Iran has exported about 1.2 million barrels of oil per day to China so far this year, according to data firm Kpler, although that is about 12% less than the same period last year.
Additionally, Iranian oil reserves in tankers floating in the sea have reached about 48 million barrels, which is much more than 33 million barrels at the beginning of February.
Global Impact Experts believe that if India keeps away from Russian oil and China continues to buy cheaply, the balance of the Asian energy market could change. This could have a long-term impact on global oil prices, shipping routes and geopolitical equations.
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