India expects to receive Russian oil for next two months, says government source

India expects to receive Russian oil for next two months, says government source

India, the world's third-largest oil importer and consumer, does not expect any disruption to Russian oil supply in the next two months as US-sanctioned tankers are allowed to discharge crude until March, a senior government official said on Monday.

The US Treasury on Friday imposed sanctions on Russian oil producers Gazprom Neft and Surgutneftegaz, as well as 183 vessels that have shipped Russian oil, targeting revenue Moscow has used to fund its war with Ukraine.

India will allow Russian oil cargoes booked before Jan. 10 to discharge at ports, the source told reporters on condition of anonymity.

"The market is waiting for Russia to respond on sanctions," he said. "Russia will find ways to reach us."

He added that Russia could offer deeper discounts for crude exports to India to meet the $60 a barrel price cap to continue exports. The cap was imposed by Group of Seven countries in 2022 to curb Russian oil revenue used to fund the Ukraine war.

Global Brent crude futures extended gains to climb above $81 a barrel on Monday, their highest since August, on expected disruption of Russian oil supply to China and India. [O/R]

"The spike in price is a knee-jerk reaction," the source said, adding that Brent will ease below $80 because there is no shortage of supply.