The actions of OPEC and its allies, trying to push up the price of oil, are driving up the cost, including of Russian raw materials, which could create problems for its Indian buyers, writes Bloomberg.
Indian banks fear that the price of oil purchased from Russia will rise above the ceiling of $60 per barrel set for it by the G7 countries and the European Union. Credit institutions are closely monitoring prices at ports of shipment, sources say.
State Bank of India and Bank of Baroda have informed refiners that they will not accept payments for Russian oil purchased at a price above this ceiling, a top manager of one of the companies involved in purchases from Russia told the agency.
The price of June futures for Brent on Thursday is about $87 per barrel. Russian oil trades at a discount to Brent, but if the benchmark rises above $95 per barrel, its price will exceed the price ceiling of $60 per barrel, says another industry top manager in India.
A third sector spokesman told Bloomberg that in this case, some refiners may try to make payments through other banks that have fewer overseas operations.
Rising oil prices may also complicate the conclusion of long-term agreements with Russian suppliers, reports Interfax.
If prices rise above the ceiling, the number of tankers ready to transport Russian oil will decrease, said Serena Huang, an analyst at Vortexa Ltd. This will increase transportation costs and limit supplies from Russia to India, the expert believes.
India and China are the key buyers of Russian oil at present. For India, which took advantage of the price decline, Russia has already become the largest supplier of oil.
