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Russian oil exports to India jump 25 times but Indian companies’ dividends stuck

Western sanctions on Moscow have created an opportunity for Indian refiners to increase purchases of Russian oil on the one hand and obstructed payments on the other

India has received 34 million barrels of discounted Russian oil since February, more than 10 times the value of the total imports from the country year-on-year, Reuters reported on Monday, citing Refinitiv Eikon data.

According to the report, more than 24 million barrels of Russian crude were supplied this month, up from 7.2 million barrels in April, and from about three million barrels in March. The South Asian nation is set to receive about 28 million barrels in June, data shows.

Last year, Russian crude exports to India averaged just 960,000 barrels per month, roughly 25 times less than this month’s total.

Western sanctions on Moscow have created an opportunity for Indian refiners to increase purchases of Russian oil (mostly Urals crude) at discounted prices, as some European customers have been vocally reluctant to buy Russian crude.

India has come under fire from the West for its continued purchases of Russian oil. However, New Delhi has rebuffed the criticism, saying those imports make up a fraction of the country’s overall needs. Authorities also said India will keep buying “cheap” Russian oil as a sudden stop could drive up costs for its consumers.

Previous media reports had indicated that the world’s third-biggest oil importer was seeking Russian crude at less than $ 70 a barrel to compensate for additional hurdles caused by sanctions.

Indian oil companies’ dividends worth $ 125.5 million stuck in Russian banks

But the booming Russian oil market in India notwithstanding, Indian companies with stakes in two Russian assets are unable to repatriate 8 billion roubles ($ 125.49 million) in dividends because of stringent sanctions by the US-led Nato bloc, an official at Oil India Ltd said last Friday. A consortium of Oil India, Indian Oil Corp and Bharat Petroleum Corp owns 23.9% of the Russian Vankorneft oil project and 29.9% of the Tass-Yuryakh oilfield in eastern Siberia.

European countries and the US have imposed heavy sanctions on Russia since Moscow sent troops into Ukraine on 24 February, but India has not explicitly condemned the action.

The dividend is supposed to be paid quarterly for Tass-Yuryakh and half-yearly for Vankor fields.

“Our dividend is lying in Russian banks. We cannot get it because of problems in swift clearance and other issues,” said Harish Madhav, head of finance at Oil India, at a press conference to announce its quarterly earnings.

Government-run Oil India’s net profit in the March quarter surged 92.32% to Rs 16.30 billion ($ 210.20 million) as crude prices rose.

Oil India Chairman SC Mishra said the union government was “reviewing” the exit of companies from Russia and a consortium of Indian companies could consider buying stakes in those assets. “So far, there is no aggressive approach from us,” he added.

It was reported in April that India had asked state-run energy companies to evaluate the possibility of buying Russian oil and gas assets shunned by BP and Exxon Mobile Corp in Russia.

Shell is in talks with Indian companies to sell its stake in a major liquefied natural gas plant in Russia, sources said.

India’s largest gas transmitter GAIL India Limited is open to buying distressed Russian oil and gas assets if the deal makes commercial sense, its chairman said earlier on 27 May.

With inputs from Reuters

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