India's Reliance Industries Ltd has purchased millions of barrels of crude oil from the Middle East and the United States after Washington imposed sanctions on Rosneft and Lukoil, Russia's largest oil companies.

Source: Bloomberg, citing traders familiar with the matter

Details: Deliveries are expected in December or January.

"Reliance has been India's biggest importer of Russian oil by volume this year, taking crude via a long-term contract with Rosneft PJSC – one of the blacklisted companies," Bloomberg says.

Although Reliance has previously purchased Middle Eastern oil, recent procurement, including some earlier this week before US sanctions, has been more active than usual, the sources said.

The company bought at least 10 million barrels on the spot market in October, mostly Middle Eastern grades. Most of this crude was bought after US sanctions.

Bloomberg predicts a sharp reduction in supplies of Russian oil to large Indian refineries after US sanctions on Rosneft and Lukoil, except for Nayara Energy Ltd, in which Rosneft owns shares.

Background:

• Reuters previously reported that a sharp drop in demand for oil from Russia's two largest clients – India and China – would reduce Moscow's oil revenues and force major importers to seek alternatives.
• The United States has imposed sanctions on the Russian oil companies Rosneft and Lukoil and their subsidiaries.
• On 23 October, the European Union approved its 19th package of sanctions against Russia.
• Reuters reported that Indian refineries are prepared to drastically reduce imports of Russian oil after the United States imposed sanctions on Lukoil and Rosneft.

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