Millions of barrels of Russian oil are already close to India

More than 15 million barrels of Russian oil are floating within easy reach of India, offering the nation a quick fix to Middle East supply shortages after the US issued a temporary license allowing purchases.

The crude is sitting on more than a dozen tankers in the Arabian Sea and the Bay of Bengal, according to ship tracking data compiled by Bloomberg. These cargoes — which appear to be unsold, or without a specific destination port — could reach India in a week or less.

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Another eight vessels carrying roughly 7 million barrels of Russian Urals oil are idling off Singapore and could also reach India within a week. Beyond that, more cargoes are moving east through the Mediterranean Sea and the Suez canal, and could potentially reach India in under a month.

The South Asian nation, which became a major importer of discounted Russian oil following the invasion of Ukraine, had sharply cut back on the purchases under US pressure. But the war in the Middle East has cut off its access to replacement supplies from Persian Gulf producers, prompting Washington to give it a one-month waiver to resume buying.

Tankers laden with Russian oil had begun changing their destination to signal Indian ports even before the license was issued late on Thursday in Washington. About 18 vessels carrying Urals are now indicating they’re heading to India, according to Kpler.

“Refiners could quickly ramp up purchases again, potentially pushing volumes back above 2 million barrels a day in the near term,” said Sumit Ritolia, an analyst at the data intelligence firm. “The steep discounts previously seen on Russian crude could narrow significantly and may even shift toward premiums.”

Russia’s flagship Urals grade had been trading at deep discounts to ICE Brent as India pulled back on purchases and China was left to absorb stranded cargoes. The resumption of Indian purchases and the shortages caused by the Middle East crisis will temporarily reverse that trend.

Indian refiners have already bought more than 10 million barrels of Urals in recent days, paying premiums to Brent for cargoes inclusive of freight and delivery costs. Prices are as much as $12 a barrel higher than in previous weeks.