Indian refiners are actively negotiating to secure Russian oil supplies for the upcoming year, as confirmed by a government source on Thursday. This strategic move comes amid a backdrop where suppliers are primarily utilizing Russian insurance for crude priced above the $60 per barrel cap established by the G7, European Union, and Australia to limit Russia’s oil revenue post-Ukraine invasion.

As India’s top oil supplier, Russia plays a critical role in meeting the country's energy needs. Indian refiners, particularly private companies, have successfully signed annual contracts for Russian oil, while state refiners are opting for spot market purchases. The reliance on Middle Eastern producers remains significant, with discussions for term deals with these suppliers set to commence in December.

Oil Minister Hardeep Singh Puri reaffirmed India's intent to continue purchasing Russian oil from non-sanctioned entities due to competitive pricing. The shift towards using Russian insurers has enabled Moscow to navigate the price cap challenge, allowing sales above $60 per barrel without facing immediate sanctions.

The source highlighted the changing dynamics in negotiation positions, emphasizing that with global oil demand estimates being adjusted downward, Indian refiners might seek more favorable terms. Additionally, transactions for Russian oil are primarily conducted in Emirati Dirhams and US dollars, with historical precedents of payments being made in Rupees and Chinese Yuan for certain deals.

This complex landscape underscores the balancing act Indian refiners are performing, navigating international sanctions while securing vital energy resources at competitive prices.