Surging sea freight is eroding the economics of long-haul crude shipments,
pushing Indian refiners toward Persian Gulf barrels and away from Russian
supply. Traders said some Iraqi cargoes were offered more than $25/bbl below the
Dubai benchmark on a pre-loading basis; on an India-delivered basis that equates
to a few dollars per barrel below spot Brent. Russian grades are being quoted
about $2/bbl over regional benchmarks, making them uneconomic for many Indian
buyers. Bharat Petroleum’s CFO said November Russian shipments have fallen
sharply as “commercial viability” declined. Aramco recently sold a spot cargo at
up to a $10/bbl discount to Dubai, and ADNOC sold roughly 20 million barrels for
December loading at a slight discount.
