Spotlight of the Week

Russian Dirty Oil Flows | India
Trend Reversal: Late November shows a noticeable easing in Russian loadings to India, with the 21-day MA around 30% below end-October.

​​​​​​India has not completely halted purchases of Russian crude. November arrivals are on track to reach a multi-month high as refiners front-loaded purchases ahead of the U.S. sanctions deadline. However, the TSOP 21-day moving average of Russian flows has already declined from its late-October peak and is now trending lower following the U.S. measures on Rosneft and Lukoil, announced in late October and effective from 21 November. Together with the sanctions wind-down, this points to a sharp drop in arrivals from December onward. Although Indian refiners can still buy Russian crude from non-sanctioned intermediaries, several developments indicate that inflows are likely to continue falling, rather than stabilising or rebounding:

• Following the U.S. sanctions announcement, Reliance Industries accelerated its exit from Russian crude at its export-oriented SEZ refinery at Jamnagar. The last Russian cargo was loaded on 12 November, and any barrels arriving after 20 November are being diverted to the Domestic Tariff Area rather than entering the export stream. This effectively ends the use of Russian feedstock in the SEZ ahead of the 21 November wind-down deadline.
• Russian-linked shipments face a higher compliance burden in insurance and banking. This raises the operational risk profile for all importers, not just Reliance, and contributes to expectations that Russian inflows will ease from December onward.
• Indian Oil Corporation (IOC) has successfully procured approximately five December-arrival Russian crude cargoes from suppliers not subject to sanctions. While this confirms that Russian crude flows continue, the secured volume, around 3.5 million barrels of ESPO-grade, is small compared to IOC’s previous intake before sanctions. IOC’s policy is to buy Russian crude only if the associated sellers and shipping lines are not sanctioned. This emphasizes that the continuity of future inflows is wholly dependent on finding compliant, non-designated counterparties, rather than being driven solely by underlying demand or pricing.

Net Supply Vs Baltic Rates
AG | Last 12M Avg: 107 Vessels

• In the AG, even as supply increased from ~76 in early September to over 100, rates remained elevated. TD3 was already near WS 98 in mid-September and continues to display firmness into late November.

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WAFR | Last 12M Avg: 13 Vessels

• In WAF, TD15 has surged as net supply dropped to multi-month lows, with rates holding firm around WS 120 even as availability began to pick up in late November.

VLCC Congestion | Discharge China +11% WoW

• Discharge congestion in China has climbed sharply from early-autumn lows to the highest levels of the year, tightening effective tonnage supply and adding to the firmer sentiment on long-haul crude routes.

Macro Elements 

• Oil price projections | JPMorgan recently warned that a structural oversupply in the oil market could cause prices to fall sharply by 2027. In their base-case scenario, Brent crude is projected to be around $57 per barrel in 2027. However, under their downside scenario, if oversupply persists and producers fail to cut output, Brent prices could fall into the $30s per barrel by the end of 2027.
• Some Indian banks are cautiously exploring financing of Russian-origin oil trades, provided the Russian counterparties and shipping/insurance lines are not under U.S. or EU sanctions. This reflects a narrow path to re-enter Russian crude supply without violating sanction regimes. The proposed mechanism involves complex compliance: payments routed through alternative currencies (e.g., UAE dirham, Chinese yuan) and rigorous vetting of counterparties to ensure no sanctioned entity is involved.