Of course, the war between Russia and Ukraine is ongoing, but Russia’s economy is recovering. This is the reason why Russia has now increased the prices of its crude oil drastically. This increase is also for India, to which Russia was selling oil at low prices by giving discounts a year ago.
According to a report by news agency Reuters, Russia is now giving crude oil to India at $80 per barrel. This rate is 20 dollars more than the price cap imposed on Russian oil by Western countries. Let us tell you that after the attack on Ukraine, America and Western countries imposed a price cap of $60 per barrel on Russian oil to hurt the Russian economy.
Massive Reduction In Discount Also
It is being told that due to the reduction in oil production, India is no longer getting the same leeway from Russia. Now, India is getting a discount of only 4-5 dollars per barrel, whereas, till last year, this discount was 30-35 dollars per barrel.
In such a situation, buying crude oil from Russia becomes expensive after the exemption’s end. Due to the increase in prices, buyers have been discouraged, and there has been some demand reduction. According to business flow data from Kpler and Refinitiv, India’s oil imports from Russia fell to a seven-month low in August.
Due To This, The Prices Have Increased
The biggest reason for the increase in Russian oil is that Saudi Arabia and Russia have significantly reduced oil production. Due to production cuts, supply has been reduced, and prices have increased. Apart from this, there has also been a decline in oil production of OPEC+ countries. Besides this, amid the global oil shortage, Russia has also banned the export of diesel and gasoline. Due to this, the prices of crude oil have increased further.
Compulsion Behind Buying Expensive Oil From Russia
Even though Russian crude oil has become expensive, and due to this, many buyers have backed out, a large quantity of oil is still being imported here. The companies sourcing oil say that they do not have many options. The options available are more expensive than in Russia. Other oil-producing countries have also made the prices expensive.
