IndianOil to comply with US curbs on Russian oil

NEW DELHI: India’s largest oil refiner and fuel retailer, IndianOil, on Monday said it will comply with international sanctions, without referring to the latest US curbs on Rosneft and Lukoil — two of the largest Russian crude exporters.“We will abide by all sanctions imposed by the international community,” company chairman Arvinder Singh Sahney said but declined to specify whether IndianOil will stop buying discounted Russian crude.IndianOil is the second Indian refining entity after private sector Reliance Industries Ltd to pledge compliance with the latest US sanctions or restrictions imposed by the European Union on import of products refined from Russian oil. Sahney’s statement came on a day when IndianOil posted a net profit of Rs 7,610 crore in the July-September period against Rs 180 crore a year-ago. This was largely driven by a quantum jump in refining margin of $10.6 per barrel against $1.8 in the previous corresponding period and a marginal inventory gain.On whether discounted Russian crude, accounting for 21% of oil consumed by the company during the period under review, contributed to the margins hitting double digits after several quarters, Sahney said the company had posted similar results in the past even without Russian crude.“It is about market conditions… cracks (broadly the difference between the going price of crude and refined products), cost reduction and improvement in efficiency,” he said.The statement addresses apprehensions over adverse impact of stopping crude intake from the sanctioned Russian entities. It will be pertinent to mention that IndianOil — and other public sector refiners — has been buying Russian oil from intermediaries through global tenders, unlike their private sector peers. But since the latest sanctions have made crude from the sanctioned Russian entities, which export 3-4 million barrels of oil per day, ‘tainted’, Indian refiners are expected to pivot away for fear of attracting secondary sanctions after the cut-off date of November 21. Interestingly, imports by subsidiary Chennai Petroleum Corporation Ltd have halved in October, coinciding with the US sanctions.