India continues as top buyer of Russian Urals oil in August despite price hikes​​​

India remained the main buyer of Russian Urals oil loaded from the state’s ports in August, despite a record rise in prices for the grade, traders, LSEG data and Reuters calculations showed. Indian refineries said in August that the Urals discount to the dated Brent benchmark crude had narrowed too much, making them cut purchases of the grade in September. Discounts for Urals oil loading in August narrowed to $5 per barrel and below on a DES (delivered ex ship) basis in Indian ports - a record low since a European Union embargo on Russia’s oil. Along with the EU embargo, the G7, the European Union and Australia imposed a $60 per barrel price cap last December on sea-borne exports of Russian crude in retaliation for Russia’s war on Ukraine, which Moscow calls a special military operation. The increase in prices for the Russian grade was due to Russia’s pledge to cut oil exports in August by 500,000 barrels per day (bpd) in cooperation with OPEC+ to balance oil markets. Russia has pledged to cut oil exports by 300,000 bpd until year-end. Russia’s high dependence on India as its main oil buyer is a rising concern for its oil companies this month, as an expected rise in loadings from Primorsk, Ust-Luga and Novorossiysk port in September coincides with a decrease in demand in India amid seasonal maintenance. In August, Russian Urals oil deliveries to India accounted for about 69% of the total shipments from Primorsk, Novorossiisk and Ust-Luga, or about 74% of the shipments of Russian-origin crude oil - in line with July, according to Reuters calculations based on LSEG and traders’ data. The share of Urals and Kazakhstan’s KEBCO oil, which is also shipped via Russian ports, to Turkey was little changed in August from July, at about 12% of the total volume, Reuters calculations showed. The share of Urals seaborne exports to China rose to 7% in August from 5% in July, according to Reuters calculations based on the data. Deliveries of Urals to China in August increased due to the shipment of 200,000 tonnes of the grade from Baltic ports to China via the Northern Sea Route (NSR). NSR is a route currently only available for crude oil supplies from Russia for four to five months a year due to the tough ice situation.