Russia, facing harsh Western sanctions over its invasion of Ukraine, warned the European Union in April against sweeping coal sanctions, saying they would backfire as fuel would be redirected to other countries. other markets.
India has refrained from condemning Russia, with which it has long-standing political and security ties, while calling for an end to violence in Ukraine. New Delhi defends its purchases of Russian products as part of an effort to diversify supplies and argues that a sudden shutdown would drive up global prices and hurt its consumers.
US officials have told India there is no ban on energy imports from Russia, but they don’t want to see a “rapid acceleration”.
Yet, while European importers avoid trade with Moscow, Indian buyers are consuming huge amounts of Russian coal despite high transportation costs.
Its purchases of coal and related products increased more than sixfold in the 20 days to Wednesday from the same period a year earlier to $331.17 million, according to unpublished Indian government data reviewed by Reuters.
Similarly, Indian refiners have taken over cheap Russian oil shunned by Western countries. The value of India’s oil trade with Russia in the 20 days to Wednesday jumped more than 31 times to $2.22 billion, the data showed.
India’s Commerce Ministry did not immediately respond to a request for comment on Saturday.
“Russian merchants have been liberal with payment lanes and accept payment in Indian rupee and UAE dirham,” a source said. “The discounts are attractive and this upward trend in Russian coal purchases will continue.”
The purchase of coal continues
Offshore units of Russian coal traders such as Suek AG, KTK and Cypriot company Carbo One in places like Dubai and Singapore were offering discounts of 25-30%, triggering bulk purchases of Russian thermal coal by traders supplying utilities and cement manufacturers, the sources said.
The second source said Suek’s Singapore-based unit also accepts payments in dollars.
Suek and KTK did not immediately respond to requests for comment. Reuters could not immediately reach Carbo One.
The EU ban banned new coal contracts and by mid-August will force member countries to terminate existing ones.
India bought an average of $16.55 million worth of Russian coal a day in the three weeks to Wednesday, more than double the $7.71 million it bought in the three months after the February 24 Russian invasion, according to Reuters calculations.
Oil purchases averaged $110.86 million per day over the 20-day period, more than triple the $31.16 million spent in the three months ended May 26.
Bulk Indian purchases of Russian coal are expected to continue, with June imports set to be the largest in at least seven-and-a-half years, ship tracking data from Refinitiv Eikon showed.
Bulk shipments of Russian thermal coal began arriving in India in the third week of May, with orders mostly from cement and steel companies and traders, according to shipment data compiled by a trader in Indian coal.
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