Ukraine war: Who is buying Russian crude oil and who has stopped
Here is the response by countries regarding purchases of Russian oil since the war in Ukraine started on Feb. 24 and how companies have acted. Countries’ responses Australia, Britain, Canada and the United States have imposed outright bans on Russian oil purchases but the 27 members of the European Union have not been able to agree on the embargo. The bloc is leaning toward a ban on imports of Russian oil by the end of the year as part of a sixth package of sanctions against Russia. Germany, the EU’s largest economy, said it would be able to weather an EU embargo on Russian oil imports by the end of this year even though a stoppage could result in shortages. Hungary said it still opposed any European Union embargo on Russian oil and gas imports. Many refiners in Europe, however, have stopped buying Russian crude voluntarily, or promised to do so when their long-term contracts expire. Major global trading houses are also planning to reduce Russian crude and fuel purchases from May 15. As a result, Russian diesel exports from the Baltic port of Primorsk, a key supply source for Europe, were set to drop by more than 30% in May. China and India, which have refused to condemn Russia’s actions, continue to buy Russian crude. Current buyers Bharat Petroleum Indian state-run refiner Bharat Petroleum Corp Ltd has bought 2 million barrels of Russian Urals for May loading from trader Trafigura, two people familiar with the purchase said. The company regularly buys Russian Urals for its 310,000 barrels per day (bpd) Kochi refinery in southern India. Hindustan Petroleum India’s state refiner bought 2 million barrels of Russian Urals for May loading, according to trading sources last week. Indian Oil Corp India’s top refiner has bought 6 million barrels of Urals since Feb. 24 and has a supply contract with Rosneft for up to 15 million barrels of Russian crude in 2022. However, the refiner, which also buys crude on behalf of its Chennai Petroleum subsidiary, has excluded several high-sulphur crude grades, including Urals, from its latest tender, according to trading sources. ISAB Italy’s largest refinery, owned by Lukoil-controlled Swiss-based Litasco SA, has been forced to source nearly all of its crude oil from its Russian owner because international banks are no longer providing it with credit. The Italian government is considering temporary nationalisation of ISAB as one of its options if sanctions are imposed on Russian oil, two government sources told Reuters. Mangalore Refinery and Petrochemicals The state-run Indian refiner has bought 1 million barrels of Russian Urals crude for May loading via a tender from a European trader, a rare purchase driven by the discount offered Nayara Energy The Indian private refiner, part-owned by Rosneft, has purchased Russian oil after a gap of a year, buying about 1.8 million barrels of Urals from Trafigura
9,380 PNG connections provided till March 31
As many as 9,380 domestic connections of petroleum natural gas (PNG) have been provided, and 63 compressed natural gas (CNG) stations have been commissioned in the state till March 31, as per the latest figures of the industries department. Though PNG domestic connections have been provided only in three districts out of the targeted 11 districts, yet CNG stations have been opened in almost all the 11 districts except in Kasaragod. The highest number of PNG connections have been provided in Ernakulam (8,864), followed by Alappuzha (391) and Thiruvananthapuram (125). However, the targets set for March for other districts have not materialised yet. As per the set target for March, Kannur was supposed to be provided with 2,000 connections, Kasaragod and Palakkad with 1,000 connections each, as many as 1,200 connections in Alappuzha, and 250 connections in Thiruvananthapuram. As part of the city gas distribution network’s development in the state, the petroleum and natural gas regulatory board (PNGRB) had awarded the work of the project to M/s Atlantic Gulf and Pacific for the distribution of natural gas in Thiruvananthapuram, Kollam and Alappuzha districts, which are not covered by GAIL pipeline. In Ernakulam,Thrissur, Palakkad, Kozhikode, Wayanad, Malappuram, Kannur and Kasaragod, the task has been handed over to M/s Indian Oil-Adani Gas Private Limited. Chief minister Pinarayi Vijayan had last year announced in the Assembly that as many as 615 compressed natural gas (CNG) filling stations are expected to be operational across the state by 2026. The Kochi-Koottanad-Bengaluru-Manguluru GAIL pipeline project was completed in two phases in the state. While in the first phase, a 48km pipeline was completed, in the second phase of the project, a 450km pipeline was completed. The chief minister said that the completion of the GAIL project has provided a fillip to the industrial development of the state and would bring down expenditure on fuel substantially.
Tarun Kapoor, former petroleum secretary, appointed advisor to PM Modi
Former petroleum secretary Tarun Kapoorhas been appointed as an advisor to Prime Minister Narendra Modi, according to a government order issued on Monday. Kapoor, a 1987-batch IAS officer of the Himachal Pradesh cadre, superannuated as the secretary of the ministry of petroleum and natural gas on November 30, 2021. he Appointments Committee of the Cabinet has approved appointment of Kapoor, as an advisor to the Prime Minister, in the Prime Minister’s Office (PMO), in the rank and scale of Secretary to Government of India, initially for a period of two years from the date of joining,” the personnel ministry order said. Senior bureaucrats Hari Ranjan Rao and Atish Chandra have been appointed as additional secretaries in the Prime Minister’s Office (PMO). Rao is a 1994-batch lAS officer of the Madhya Pradesh cadre and is currently an administrator at Universal Services Obligation Fund in the department of telecommunications. Chandra, Rao’s batchmate from the Bihar cadre, is currently chairman and managing director (CMD), Food Corporation of India, department of food and public distribution.
India Negotiating With Russia To Buy 20 Million Barrels Of Discounted Oil And Enter Russian Markets Exited By The EU
India and Russia are engaged in talks over alternative payment mechanisms as both sides are negotiating for about 20 million barrels of crude from Rosneft at heavily discounted prices. The demand for energy in India is acute and increases during the summer months due to the heat and the need for cooling devices. Energy consumption grew 8.9% in March over February this year and reached an all-time record of 199.58GW on April 8. Those usage records can be expected to be constantly revised upwards. India has discounted European issues over Ukraine, increasingly seeing it as a European problem not of India’s making. India’s Ministry of Energy has consistently stated that its objective is to stabilise its economic engagement with Russia even as there is a possibility that the Western sanctions against Russia could impact India. Ministry spokesperson Arindam Bagchi has said. “Our objective has been to see how we can stabilise the economic transactions or economic engagement that we are doing with Russia in the current context. There is a possibility that these sanctions might impact us and that is why we are having inter-ministerial discussions and other conversations to see how we can keep our economic interactions with Russia stabilised and to see how we can ensure our own interests are not affected.” Western demands for Asian action against Russia are proving problematic as the situation was not created by Asian nations, and their energy strategies have long included Russia. India for example imports gas from Russian fields in the Arctic. Due to Russia’s continuing energy trade with the US and EU, Rosneft has several non-sanctioned intermediaries and trading companies which are in legitimate, non-sanctioned supply talks with Indian companies. India has also shown interest in potential for shipbuilding activities in Vladivostok and Gujarat in Western India for design and building of the next generation of oil and gas tankers. Prime Minister Modi was the chief minister of Gujarat from 2001 to 2014, with the area having shipbuilding yards with an eye on not just Arctic capable shipping but also to service the International North-South Transportation Corridor (INSTC) requirements. The INSTC is a Suez Canal alternative route running maritime from Mumbai to Iran then multimodal north through Iran and onto Caspian Sea Ports to both Central Asia, the Caucasus and Europe. This ‘Southern’ route is likely to prove popular as it allows goods transit from the EU to Asia without the need to transit via Russia. India has also established the Vladivostok-Chennai maritime corridor with extensions through to Mumbai with India and Russia collaborating on Indian Ocean transportation routes to supply India and Southeast Asia with LNG supplies from the Yamal fields in the Russian arctic – along the Northern Sea Passage. India has also shown interest in sourcing organic fertilizers from Russia, an interesting development in view of the fact that New Delhi has stated its intention for India to develop as a major grain and wheat exporter given disruptions to the global supply chain created by the Ukraine conflict – both Russia and Ukraine are major wheat suppliers. India is rolling out measures during 2022 to try and take advantage include ensuring that government approved laboratories adequately test the export quality, making additional rail wagons available, and working with port authorities to give priority to wheat exports. India has an advantage of surplus stocks at home and a sharp rise in global prices. So far, the organisation appears to be on track. Indian wheat exports picked up in 2021 to reach 6.12 million tonnes, up from just 1.12 million tonnes the previous year. A 2022 target is believed to be the export of 10 million tonnes of wheat after the new season harvest in June/July. India’s strategy as concerns preserving its energy credibility includes, along with other Asian nations such as China, the purchase of Russian crude oil at heavily discounted prices from Russian SOE Rosneft, which also operates India’s second largest refinery. India is also keen to fill the vacuum in the merchandise sector after the withdrawal of European companies from the Russian market and is looking to boost trade by an annual US$2 billion per annum. Delhi is negotiating a Free Trade Agreement with the Eurasian Economic Union and this can be expected to progress further once the Ukraine situation is resolved.
Indian Oil Corp eyes the carbon capture opportunity for clean hydrogen production
Indian Oil Corporation Limited (IOCL) is looking to clean-up operations at its Gujarat oil refinery with carbon capture and utilisation technology that could capture almost 700,000 million tonnes of carbon dioxide (CO2) emissions annually from its steam methane reforming (SMR) based hydrogen generation unit. Dastur International and Dastur Energy have joined forces to bring what could be India’s largest carbon capture and utilisation project to life as a way of decarbonising IOCL’s operations and support the production of clean hydrogen, with support of a United States Trade and Development Agency (USTDA) grant. Once captured, it is believed some of the captured CO2 will be liquified and purified to 99.9% for supply to food and beverage customers. That being said, the majority of the gas will be used at the Oil and Natural Gas Commission’s (ONGC) Gandhar oilfields for enhanced oil recovery (EOR) from its manufacturing oil wells. The carbon capture system set to be deployed at the Indian refinery has been designed by Dastur and will provide IOCL with an integration solution across the carbon value chain, enabling industrial-scale carbon capture and disposition. At this point in time, a successful Techno-Economic Feasibility study has been carried out. Shri SSV Ramakumar, Director of R&D and Board Member of IOCL, said, “The project and Dastur’s work provide a blueprint for IOCL and ONGC to pursue the ambitious goal of combining industrial-scale carbon capture with CO2 EOR in India.” “Dastur and its partners evaluated different CO2 sources and carbon capture technologies from multiple vendors to engineer a techno-economically feasible solution that we can implement within the constraints and challenges of a large and complex operating refinery. The novel use of advanced gas processing to provide an extremely competitive cost of carbon capture bodes well for the future success of the project.” Atanu Mukherjee, President and CEO of Dastur, added, “I want to thank IOCL and our partners for their contribution in achieving a globally competitive cost of CO2 capture, including opex and capex in this design and charting the path forward for the first industrial-scale CCUS project in India.” “Carbon capture and its effective utilisation is a central building block for enabling the future transition to net zero. We are committed to supporting our clients worldwide in implementing effective energy transition plans, whether it be at North America’s first carbon capture project at the blast furnaces at Cleveland-Cliffs’ Burns Harbour steel plant or a Middle East oil major’s recent plan to capture multi-million tonnes of CO2 for large scale EOR.
Indian Crude Oil Price Up For Two Straight Days, Even As Political Blame Game Intensifies
The Indian crude oil basket rose to nearly $103 per barrel on Wednesday, up for the second straight day after falling below $100 a barrel early this week, even as the political blame game on domestic fuel rates intensified. In what has been a political potboiler, fuel rates have risen sharply since March 22 as global crude costs have jumped because of the Russia-Ukraine crisis distorting supply chains which were already disrupted by the pandemic and were just about getting streamlined. While Prime Minister Narendra Modi urged a cut to the value-added tax (VAT) on petrol and diesel prices, which state governments set, to relieve high fuel rates, many states – especially those ruled by opposition parties rejected that request. Instead, they urged the Modi government to cut the cess, which the centre levies. Beyond that political debate, in the international markets, the price of the Indian crude oil basket jumped to $102.98 per barrel at an exchange rate of Rs 76.64 against the dollar on Wednesday, according to the latest report from the Petroleum Ministry’s Petroleum Planning and Analysis Cell’s (PPAC) released on Thursday. That price had fallen below the $100-mark on Monday, but it bounced back above that level on Tuesday to $100.2 per barrel. Indeed , the PPAC had reported India’s crude oil basket price eased to $99.17 per barrel on Monday from a high above $100 in the previous week. That see-saw in prices reflects the volatile trades in the global crude markets, which have been whiplashed between supply and demand dynamics but have primarily held above the $100-a-barrel-mark.
Subramanian Swamy attacks the Modi government for buying Russian crude oil with ‘Bankrupt Govt’ jibe
BJP’s Rajya Sabha MP Subramanian Swamy has attacked the Centre’s Narendra Modi government for buying cheap Russian crude oil, calling his own party’s government’s ‘bankrupt.’ Reacting to a newspaper report on How Vladimir Putin’s war ended Narendra Modi’s cheap natural gas dream, Swamy wrote, “Breaking International Humanitarian law of Democratic nations, Modi Govt has bought Russian crude, paying in rupees and using the margin saved as part of revenue of Govt.. Bankrupt Govt!!” This was after a user asked him why prices of petrol were continuing to skyrocket despite Modi choosing to buy cheap Russian crude oil. Swamy said that ‘losing the war in Ukraine and the use of n weapons will make Russia much like the Thar Desert.’ Earlier this month, US president Joe Biden had reportedly told Modi that increasing oil imports from Russia was not in India’s interest. According to White House Press Secretary Jen Psaki, Biden conveyed his sentiments during his virtual talks with Modi saying that the US ‘stands ready to help India diversify its energy imports, which would make it less reliant on Russia.’ “The president has made clear that he does not believe it’s in India’s interest to accelerate or increase imports of Russian energy and other commodities,” Psaki was quoted as saying. Modi had blamed the non-BJP states in India for not reducing VAT on petrol and diesel despite the excise duty cut by the Centre last November. This, he had said was ‘injustice’ to the people since the benefits were not being transferred to them. Modi had also blamed the Russian invasion of Ukraine for the rising fuel prices in India. “The situation of war which has arisen, has affected the supply chain, and in such an environment, the challenges are increasing day by day,” Modi had said during his meeting with chief ministers of various states in the country.
The UK Could Give Up Russian Gas Sooner Than Thought
In the week when Gazprom finally did what Europe was afraid it would do and started cutting off gas supplies to countries unwilling to pay for them in rubles, Russian gas reliance has really hit the spotlight. And at least one country in Europe believes it can eliminate its dependence on it sooner than previously believed. Bloomberg reported earlier this week that the UK could stop importing Russian natural gas before this year’s end. Citing an unnamed source familiar with the government’s plans, the report noted that Russian gas exports to the UK were already a slim enough portion of total gas imports to make the phase-out possible. Details on how exactly the government planned to eliminate these imports were not divulged, but given the fact that Russian gas last year accounted for just 4 percent of total UK gas imports, replacing Russia with another supplier will be nowhere near as challenging as the same exercise would be for Germany. What’s more, Russian LNG cargos—the only form of Russian gas that the UK imports—arriving in the country have fallen further since the start of this year, reinforcing Downing Street’s conviction that the UK can get rid of Russian gas with almost no hassle. This puts the UK in a comfortable enough virtue-signaling position, from which it can urge its EU allies to reduce their own reliance on Russian gas. These allies, however, will have a harder time following in the UK’s footsteps, with Germany being the most notoriously gas-dependent European economy. The EU has been discussing energy embargos on Russia for weeks now and has so far only managed to agree on a coal import ban, which will enter into effect from August. This will allow utilities to stock up on the fossil fuel in the meantime. A gas embargo has also been on the table, but several EU members have voiced strong opposition to the idea. In Germany, businesses and trade unions have joined forces to advise against such an embargo, noting it would devastate the energy-intensive German economy. An oil embargo is an equally hard sell for Germany. Europe, as a whole, imports some 40 percent of the gas it consumes from Russia. Last year, this amounted to around 155 billion cubic meters. This year, because of the war in Ukraine, the EU has stated it will aim to reduce its intake of Russian gas by two-thirds by the end of the year, using a variety of measures, including a switch to LNG, energy conservation, a buildout in renewables, and increasing the use of coal for power generation. Meanwhile, however, gas prices soared again this week after Gazprom cut off gas deliveries to Poland and Bulgaria. The president of the European Commission, Ursula von der Leyen, has called on European energy traders not to pay for Russian gas in rubles. Germany’s Uniper, however, has said it had no problem doing just that. Hungary and Austria have also said they would pay for Russian gas in rubles. The asynchrony between Brussels and the business world has once again highlighted the drawbacks of energy dependence and the importance of local supply. The UK’s relative ease of reducing Russian oil imports also speaks to the latter. This doesn’t mean that the UK is problem-free and an example for the EU to follow, however. Last month, energy industry association Offshore Energies UK warned that the country’s gas producers were struggling to increase output, which could threaten the security of supply. This, the association said, could result in the UK becoming dependent on imports for as much as 70-80 percent of its consumption in the future.
The Oil And Gas Industry Is Booming Despite Net-Zero Ambitions
Both the European Union and the United States are firmly on the path to a net-zero economy. This much has been made clear by officials from both sides of the Atlantic despite the EU’s hunt for more gas and the Biden administration’s calls for more oil production. Yet before net-zero is achieved—if it is ever achieved—both the EU and the US will need more fossil fuels, including coal. And this means that despite calls for more renewables from both governments and the renewable energy industry, despite the active demonization of the fossil fuel industry, investments in more oil, gas, and coal production are likely to rise—at least in the short term. A recent report from Reclaim Finance, an anti-fossil fuel campaign organization, for instance, named and shamed asset managers investing in oil, gas, and coal. According to the report, 30 of the world’s leading asset managers had $82 billion invested in companies developing new coal supply, and $468 billion in 12 major oil and gas companies. “Is the asset management industry changing its investment practices in line with climate science, reducing investments in coal, oil, or gas expansion? Unfortunately, the answer is an emphatic ‘no,’” said one of Reclaim Finance’s campaigners, Lara Cuvelier. “Let’s be clear: drilling a new oil well or opening a new coal mine is not a normal thing to do in a widespread climate catastrophe,” the campaigner added. Unfortunately for Reclaim Finance and all other climate campaigners, drilling a new oil well or opening a new coal mine is the normal thing to do when demand for energy exceeds the available supply. And this is exactly what companies are doing in some parts of the world where climate campaigning is not such a force to be reckoned with. Even in Europe, some countries are reconsidering their climate plans, notably the UK and Germany. The UK earlier this year reconsidered its intention to gradually suspend all oil and gas drilling in the North Sea amid an energy crunch that began last autumn, caused the price of energy to soar, and pushed millions of households into energy poverty. The change of stance from the government naturally caused protests from environmentalists. In Germany, plans to gradually move toward a 100-percent net-zero energy system were revisited in light of potential gas shortages amid the war in Ukraine. The German government’s response to that potential danger was to plan on speedily building several import terminals for liquefied natural gas to replace Russian gas. The biggest economy in Europe and the EU, in other words, is replacing one source of fossil fuels with another, rather than replacing fossil fuels with renewables. In the United States, a similar shift is underway. Despite the decidedly green, pro-transition agenda with which President Joe Biden came into power, now that same president is calling on all oil producers willing to lend an ear to pump more because retail fuel prices are high and there are elections to be won—or lost—in November. The administration in the face of the president himself, the Energy Secretary, and the White House Press Secretary has repeatedly said that the transition agenda and the current calls for more oil production are not at odds because the latter is just a temporary measure until, presumably, renewables come into their own. Temporary or not, greater production will require greater investment. “We need fossil energy as part of this transition. This is a long transition. This is not overnight,” said Keo Lukefahr, the head of energy derivatives and renewables trading at Motiva, as quoted by Bloomberg. Not only is the transition not going to happen overnight, but it will also take a lot of effort. And investments. Last month, for instance, a CRU analyst warned the mining industry needed to invest some $100 billion in new copper mines if it was to avoid a supply deficit that could reach 4.7 million tons by 2030. All other transition metals and minerals are in potentially short supply based on demand projections. The situation at the moment is this: the world needs more energy than it is getting. People, for the most part, do not really care where their electricity comes from as long as it is there. And they tend to become rather unhappy when the prices of everything rise because fuels used to transport goods from one place to another are so expensive because the oil supply is tight. It is obvious that nobody, not even the most renewable-happy EU member, can build enough wind and solar farms to eliminate the need for additional oil and gas supplies. Investment in oil and gas production, therefore, will increase despite the grim warnings of climate campaigners. Some argue that the increase will only be needed for the medium term, but energy companies tend to plan ahead for long periods of time. If there is no point in making such a long-term commitment to additional production, they will probably not make it. If they have made this commitment, maybe they expect that demand for fossil fuels will remain steady for more than the next three or four years.
Future fuel in the country is LNG: Nitin Gadkari
Union Minister Nitin Gadkari on April 26 said that Liquefied Natural Gas (LNG) is the future fuel in India and the Ministry of Road Transport and Highways (MoRTH) will encourage flex engines for future, which can run 100 percent on bio ethanol. In an interaction with CNBC-TV18, Gadkari also spoke about the measures take by the government in the wake of recent electric vehicle (EV) accidents. “We are making standards and regulations to prevent such EV fires,” Gadkari said, adding that the ministry has appointed a high level committee to look into this. High temperatures are the reason that are causing fires, he noted. The minister urged the EV makers to stay cautious while using the battery cells and recall products if there are defects. “There are some problems in the battery cell,” Gadkari said. Speaking about the entry of Tesla into the domestic market, Gadkari said that Elon Musk can sell Tesla cars in India only if he manufactures in India. “He can’t manufacture in China, to sell in India,” the minister noted. In recent months, several states including Karnataka, Gujarat, Maharashtra, Andhra Pradesh, Telangana, Punjab, and Tamil Nadu had invited Tesla to set up a plant in their respective states. Earlier too during an exclusive exclusive interview to Network18, Gadkari had said that Tesla is welcome in India but manufacturing cars in China and selling them here is “not a digestible concept”. “Tesla is welcome in India, we don’t have any problem. Now his (Elon Musk’s) interest is to manufacture Tesla cars in China and sell them in India. We request him that you can start your own plant here. We have all ancillaries available here, you can get quality production here and you can get good sales here. So if you start here, you are welcome, no problem. But manufacturing in China and selling in India is not a digestible concept to all of us,” Nitin Gadkari had told News18 in an exclusive interview.