India closes ports to sanctioned tankers from Russia.
India plans to stop using oil tankers that have been sanctioned by the U.S. due to their role in transporting cargo for Russia. This is yet another example of the impact of Washington's measures on the global oil market.
A senior Indian official told Bloomberg that ships that fall under sanctions will be prohibited from unloading. This does not apply to vessels chartered before January 10 and unloaded before March 12. The official, who requested to remain anonymous, also stated that the effects of the sanctions will be felt within two months.
Oil supply is not an issue. OPEC has 3 million barrels per day of spare capacity, while non-OPEC suppliers such as the U.S., Canada, Brazil, and Guyana can easily add barrels.
Indian refiners are negotiating with suppliers from the Middle East to secure term deals. Depending on market conditions, they may seek additional barrels of oil.
In the event of a supply shortage, Indian refiners may lose the discounts they were receiving on Russian oil. Indian banks will also require certificates of origin to ensure that the oil does not come from suppliers that are under sanctions.
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