Friday, 29 March 2024

Why did Russia remove the discount on oil to India and continue the oil discount supply to China?

Simple

Two reasons

First is Russia supplies Oil to China vide Pipeline. This means no third parties. No insurance costs or carrier costs can play a role in the trade

Second is the Yuan. The Russians use the Yuan as a major source of payment for their imports, accepted by all their major exporters from Turkey to Malaysia to even Europe

Thus a 30% discount appears economical

With India, first the supply is vide Tankers and Insurance and Shipping costs have risen by 27% in the last few months

Thus the discount is offset by the increased Shipping and Insurance costs

Second, the Indian Rupee has no use for most of Russia’s export partners. Nobody wants the Rupee

Thus the discounts have stopped

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