Chinese Oil Buyers Reduce Russian Purchases
Chinese refiners are canceling Russian oil cargos and adopting a wait-and-see attitude after the latest U.S. sanctions on Russia’s oil industry. Bloomberg reports, citing traders, that state-owned majors including Sinopec and PetroChina had canceled previously ordered Russian oil cargos, while the so-called teapots, or independent refiners, had stopped buying Russian crude to avoid getting penalized for violating the U.S. sanctions. The publication cited Rystad Energy as estimating that some 45% of Chinese imports of Russian crude have been affected by the sanctions. The figure represents some 400,000 barrels daily. As a result of the forced change in buying habits, Russian crude is trading at a deeper discount, with the flagship Urals at $57.99 per barrel at the end of last week. China mostly imports another blend, the Eastern Siberian-Pacific Ocean or ESPO, and the cargo cancellations have pushed its price lower, Bloomberg noted. Russia became the largest single oil supplier to both China and India over the past three years, thanks to the discounts its oil carries amid Western sanctions. Now, both China and India need to find alternatives to Russian crude, of which there are plenty, but at usually higher prices. China has made itself a supply cushion by importing more crude than it is using this year, and building more storage capacity. Plans are to have 11 new storage sites with a combined capacity of 169 million barrels by the end of 2026. India is having a more challenging time replacing Russian oil supply. Russia accounts for a third of its total oil imports, which in turn account for some 85% of consumption. Due to its overwhelming dependence on imported crude, India is especially vulnerable to price differences and is especially motivated by discounts when making buying decisions. Even Indian refiners are reportedly turning away from Russian crude as well, to avoid U.S. sanction penalties.
Indian Refining Giant Switches From Russian to Emirati Crude
Bharat Petroleum, one of the largest refiners in India, has bought a cargo of Emirati Upper Zakum crude, as it seeks alternatives to Russian oil, Reuters has reported, citing unnamed sources. The cargo is 2 million barrels, to be delivered next month. Bharat Petroleum bought it on the spot market, where it previously mostly bought Russian crude, at the same rate of around 2 million barrels monthly. Reports of Indian refiners buying non-Russian oil cargoes have become frequent in the past couple of weeks, following Washington’s decision to impose sanctions on two of Russia’s biggest oil exporters, Rosneft and Lukoil. The two together handle about half the country’s crude exports, a big portion of which goes to Indian refiners. While the news initially caused a small price shock, the effect quickly evaporated as it became clear that there are ways around the sanctions, such as buying Russian crude from non-sanctioned entities and, ultimately, changing the supplier, even at a higher cost. Indian Oil Corp., for instance, last week bought as many as five cargoes of Russian crude oil for December delivery from non-sanctioned sellers. IOC is the largest refiner in India, and the purchase signals there are still ways to buy Russian crude without violating the latest sanctions, aimed at draining Russia’s energy export revenues, widely assumed in Washington to be the only source of funding for the war in Ukraine. Other Indian oil processors, meanwhile, are buying crude from elsewhere, including the Middle East, the Americas, and West Africa. That oil often costs more than Russian crude, which, thanks to the sanctions, sells at a discount, but at least there is supply, even if the bills end up higher. This could become an issue over the longer term. India imports over 80% of the oil it consumes, meaning it is quite sensitive to price increases on global markets or, in the case of sanctions, the need to switch from cheap to costlier crude.
Energy Transition Stalls 10 Years After Paris Agreement
Ten years after the landmark Paris Agreement to pursue net-zero emissions by 2050, the world faces a slowing transition to clean energy despite record-breaking renewable capacity installations. Much has changed in the energy systems in the decade since the Paris Agreement was signed in 2015. These systems faced a global pandemic, the first war in Europe since WWII, an energy crisis, a U.S. government that questioned climate change, and backlash against net-zero policies in banking and equity investment. Some things have remained constant. One is China’s undisputed leadership in clean energy investment and installations, and cheaper domestically-manufactured equipment, allowing the rollout of solar and wind power capacity at much lower costs compared to Europe and the U.S. The other constant is the EU’s unwavering insistence on decarbonizing to achieve net-zero emissions across its economies by 2050, despite soaring costs and growing political resistance to intermediate targets and warnings from trade partners that the burdensome EU climate directives on emissions and carbon prices could undermine its energy supply. Last week, the United States and Qatar joined forces for a fresh warning to Brussels that its corporate sustainability directive risks LNG imports from two of the world’s biggest exporters at a time when the EU is seeking to ban all Russian gas imports. All these developments are taking place amid growing uncertainty – both financial and regulatory – for clean energy developers. U.S. President Donald Trump pulled the United States out of the Paris Agreement – twice, on Day One of each of his terms in office. Coinciding with President Trump’s inauguration in 2025, banks started quitting net-zero alliances and stopped the previously very vocal pledges to cut off financing for fossil fuels, with a U.S. Administration, which is now openly hostile toward clean energy solutions, especially offshore wind, and which drastically scaled back U.S. renewable energy and EV incentives. Amid geopolitical, financing, cost, and regulatory challenges to clean energy, Brazil is hosting the annual global climate summit COP30 in Belem from November 10 to 21. Ten years after Paris, COP30 will take place as renewable energy installations soar to record highs, but investment and capacity additions are not yet on track for net zero or for any other intermediate or renewable energy goal. “Some countries are quietly wavering on their climate commitments on the eve of the meeting while the US very loudly questions the entire concept of global warming,” Ethan Zindler, Countries and Policy Research at BloombergNEF, says. Despite the record-high investments into clean energy technologies and soaring solar power installations, “the transition to a lower-carbon economy is not moving nearly fast enough to deliver on the ambition for net-zero emissions agreed in Paris a decade ago,” BloombergNEF noted. In the first half of 2025, China remained the world’s top market for renewable energy investment, accounting for 44% of the global total, BNEF has estimated. The U.S. U-turn in policy, on the other hand, may prompt developers and investors to reallocate capital from the United States to Europe, according to the research provider. Ahead of COP30, the International Renewable Energy Agency (IRENA), the COP30 Brazilian Presidency, and the Global Renewables Alliance (GRA) said in an October report that the world is falling behind on its renewable energy and efficiency goals despite record progress last year. The global progress report flagged bottlenecks in investment, grids, and supply chains, and urged governments for bolder renewable targets before COP30. The climate summit in Brazil is not without controversies, as were the previous two editions held in major oil and gas producing countries, the UAE and Azerbaijan. The host country, Brazil, South America’s top oil producer and exporter, is expected to push for the Belém Commitment for Sustainable Fuels—known as Belém 4x—an initiative aimed at building high-level political support for the global goal of quadrupling the production and use of sustainable fuels by 2035. But “Brazil faces a fundamental contradiction as it prepares to host COP30: leading the world in sustainable fuels while simultaneously planning an expansion of its upstream sector,” David Brown, Director, Energy Transition Research at Wood Mackenzie, said this week. “This tension reflects the complex realities facing large energy markets and companies.”
Morgan Stanley First to Revise Oil Price Forecast After OPEC+ Update
Morgan Stanley raised its price forecast for Brent crude for 2026 to $60 per barrel from $57.50 following OPEC+’s decision to pause production hikes over the first three months of next year. This was the first oil price forecast revision after the Sunday meeting of the oil-producing group, which also produced one last output hike of 137,000 barrels daily for December. “Even if the OPEC announcement does not change the mechanics of our production outlook, it does send an important signal,” the bank’s analysts said in a note, quoted by Bloomberg. “With OPEC involvement, volatility is reduced.” Investment banks have been quick to revise their price predictions for international oil benchmarks after almost every OPEC+ meeting, with the revisions being invariably in the downward direction amid expectations of a supply overhang emerging this year and extending into 2026. According to ING’s head of commodity analysis, Warren Patterson, OPEC+’s decision to pause the hikes is an acknowledgment of that fundamentals imbalance. “Obviously, still plenty of uncertainty over the scale of the surplus, which will be dependent on how disruptive U.S. sanctions will be to Russian oil flows,” Patterson said, as quoted by Reuters, today. RBC Capital Markets’ Helima Croft, for her part, noted Russia as a wild card, both because of the latest U.S. sanctions that have seen the two biggest importers of Russian crude shun it in favor of sanction-free alternatives, and because of continued Ukrainian attacks on oil infrastructure that could threaten supply security. “There is ample ground for a cautious approach given the uncertainty over the Q1 supply picture and the anticipated demand softness,” Croft said, as quoted by Reuters. The latest Ukrainian attack targeted the oil export terminal at the port of Tuapse yesterday. According to reports, the fire that the attack caused had damaged a ship.
Indian Refiners Pivot Away From Russian Oil
Oil prices were little changed in the current week, with bearish sentiment still ruling the markets after the U.S. agreed to a one-year truce to its trade war with China, despite reports that Indian refiners are ditching Russian oil following fresh U.S. sanctions. Brent crude for December delivery traded at $65.07/bbl at 2.22 pm ET on Friday, a slight drop from $66.48/bbl a week ago, while the corresponding WTI contract was changing hands at $60.92/bbl, down from $61.95/bbl. Last week, the Trump administration announced fresh sanctions targeting Russia’s oil and gas giants, Rosneft and Lukoil, just days after the UK unveiled similar sanctions. Previously, Trump threatened tough measures against Moscow for failing to agree to a peace pact with Ukraine, but had avoided making good on his threats. And now there are reports that Indian refiners are shunning Russian oil in favor of costlier U.S. and Middle Eastern grades in a bid to avoid incurring Trump’s wrath. Over the past three years, India has been taking advantage of cheap Russian crude, frequently offered at discounts of $8-$12 per barrel over Middle Eastern benchmarks. Russia has consistently been India’s largest supplier since mid-2022, with India buying ~1.75 million barrels per day from Russia at its peak, largely from Lukoil and Rosneft. India typically imports 86% of the oil it consumes. However, the latest round of U.S. sanctions targeting shipping, insurance and trading networks that Indian refiners leveraged to buy Russian oil at scale has narrowed those discounts and raised transaction risks, making Russian oil far less attractive. Further, the sanctions have made banks more cautious with settlement channels. Consequently, the share of Russian oil in India’s import basket has declined to 34% in the current year from 36% in the previous two years. In contrast, U.S. crude imports into India surged to 575,000 barrels per day in October, the highest level in three years, signalling a deliberate pivot. India will now have to contend with higher energy bills, “Crude oil prices surged sharply following fresh sanctions on Russian oil majors, sparking tightening supply fears and renewed inflation concerns. This could negatively impact India, as elevated crude prices may widen the fiscal deficit and strain the import bill,” Vinod Nair, Head of Research at Geojit Investments, said.
Modi’s Hardest Challenges To Boost Infrastructure
In May 2014, BJP under the leadership of Narendra Modi emerged victorious from the largest democratic election. This decisive margin of success gives Narendra Modi enormous leeway in seeking after his approach plan, which incorporates reviving the Indian economy. infrastructure2 In an effort to improve India’s economy, the BJP government has set a massive target of investing USD 500 billion in the nation’s infrastructure. This incorporates roads, power, ports, railways, water, airports, irrigation, gas, storage and telecom. However India has consistently missed such targets over the last many years. As we all know, infrastructure plays a key part in empowering economic growth. In perspective of India’s aggressive growth plans, the government is expected to review issues of private sector privatisation, tariff policy, budgetary allocation, public-private partnerships (PPPs) and fiscal incentives. There are numerous issues that need to be tended in diverse infrastructural fields. In the first place, the gap between power production and demand is influencing both manufacturing and overall growth. The transport sector is another concern for the government; while road transport is the foundation of the Indian transport infrastructure, it is lacking regarding quantity, quality and integration. Furthermore, ports and civil aviation desperately require modernisation. It is anticipated that the public sector will continue to play an essential role in building transport infrastructure. On the other hand, resources needed are much bigger than what the public sector deliver. To prove the endeavours, Modi brace the Indian economy with his foreign policy. He has underlined the significance of economic diplomacy to support trade ties and invite foreign investment into the nation. For this, Modi revitalizing its partnership with the United States, strengthening India’s ties with its South Asian neighbours and managing its relationship with China. However, India may not achieve its desired objective in a straight line or in the timeline that Modi has set for it, yet chances are really great that it will turn into a main player in the financial and geopolitical circles reasonably soon.