New US sanctions pushed Indian state refiners to request Abu Dhabi National Oil Co. (ADNOC) to price its crude on a delivered basis on Tuesday, 21 January after freight rates rose sharply this week, according to three refining sources quoted by Reuters.

Washington’s fresh sanctions – aimed at Russian insurers, oil producers and tankers – have negatively affected India, which currently imports more than 80% of its crude oil – buying large amounts of discounted product from Russia after the EU imposed its own sanctions in 2022 following Russia’s invasion of Ukraine.

In 2024, Russian oil made up a third of India’s imports, with the country also currently the third biggest importer and consumer of oil in the world.

Sanctions that affect the cost of deliveries may push India back to its original sources in the Middle East, however, most crude producers in the region currently sell the product on a free-on-board (FOB) basis on long-term contracts with buyers in Asia – in contrast with Russian dealers, who supply oil on a delivered at port (DAP) basis and include insurance, shipping and additional services on the seller’s dime.

Sources quoted by Reuters said that they wanted their term supplier to give both FOB and DAP quotes: “There is a possibility we may get better pricing in DAP, especially when freight rates are going to go up”.

Despite the wishes of Indian refiners however, ADNOC has almost never sold crude to Asian buyers on a delivered basis, according to comments from three traders with knowledge of Middle East oil deals.

So far, companies that have requested DAP price quotes from the UAE’s state-owned oil company include Bharat Petroleum Co. (BPCL), Indian Oil Co. (IOC), and Hindustan Petroleum Co. (HPCL), according to Reuters.

The refiners have also sent similar requests to other Middle Eastern supplies such as Saudi Aramco.

“In our spot tender we also give bidders an option to give quotes for both DAP and FOB cargoes. So now we want to extend that option to our term purchases as well,” the sources added.

DAP terms would see Indian companies liable for crude cargo after unloading only.