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Russian Urals oil sold to India at the lowest discount since 2022, traders claim

Four traders who are active in the market stated on Friday that spot supply has tightened and reduced discounts for Russian Urals crude oil to be delivered to Indian ports by July. This is the lowest discount since 2022.

Indian refiners are being pushed by tight supplies and narrowing discounts to look for alternative products through purchasing tenders.

Sources said that spot discounts for Urals crude for cargoes arriving to India in July decreased to an average of $2.25 per barrel, compared to $2.70 to $3.10 a barrel for dated Brent delivered ex-ship basis the previous month.

This is the smallest discount on Urals oil sold to India since 2022, when the Ukraine War broke out.

India has become the biggest buyer of Russian crude oil after Moscow diverted energy away from the European Union, which had imposed a block.

Sources claim that some Indian refiners who do not have long term supply agreements with Russian oil firms are not receiving enough Urals oil this July.

Reliance Industries, India's largest refiner, signed a contract for a long-term supply with Rosneft, the Russian oil giant, last year. This reduced the availability of Urals on the spot market.

Russian oil traders pointed to a recent increase in demand from Turkish refiners, who have increased their purchases, increasing the competition between Indian refiners and Russian refiners.

Tupras, Turkey's largest refiner of oil, has resumed purchasing Urals after earlier this year stopping due to tougher U.S. Sanctions against Moscow.

Two traders said that improving margins in the refining industry globally has also helped to boost Russian oil demand, as refiners are keen to increase crude production.

India is the largest buyer of Russian Urals by sea. Imports reached a 10-month-high in May. (Reporting from Nidhi in NEW DELHI, and reporters in MOSCOW. Editing by Clarence Fernandez.)

(source: Reuters)