Russian oil products are likely ending up in the US after being refined in India, report says

• Supplies believed to be partially mixed with Russian crude arrived in the New York and New Jersey last month, per the WSJ.
• Those cargoes likely came from India, where the supplies were refined and blended to obscure their origin.

Russian oil products are still reaching the US market because traders are obscuring their origin by blending crude and refining it elsewhere.

Supplies believed to be at least partially composed of Russian oil arrived in New York and New Jersey last month, the Wall Street Journal reported Wednesday. Those likely came from India — which has been buying discounted Russian barrels for months.

According to Kpler data cited by the Journal, a refinery owned by Indian conglomerate Reliance Industries bought seven times more Russian crude during May compared to before the war — good for about 20% of its total intake.

"What likely happened was Reliance took on a discounted cargo of Russian crude, refined it and then sold the product on the short-term market where it found a U.S. buyer," Lauri Myllyvirta, analyst at the Centre for Research on Energy and Clean Air, told the Journal. "It does look like there's a trade where Russian crude is refined in India and then some of it is sold to the U.S."

Reliance Industries did not immediately respond to Insider's request for comment.

India has maintained trade ties with Russia through the war and has snapped up discounted crude that others have shunned. The South Asian country's imports have surged to 800,000 barrels a day since the conflict began, compared to 30,000 barrels a day previously.

The US banned imports of Russian energy, including oil and certain petroleum products, in March, soon after Moscow launched its invasion of Ukraine. And on Tuesday, the European Union agreed to ban most Russian oil as well as insurance for Russian cargoes.

Still, traders have moved to keep Russian crude flowing on the market, blending it with other fuels that are then refined. At the same time, wary buyers have attempted to avoid affiliation with Russia by dealing with Russian oil marked "destination unknown."

Meanwhile, the US Office of Foreign Assets Control hasn't clarified whether refined oil products are included in its national-origin rules, according to the Journal.

"It is impossible to completely extricate Russian energy from the global market," Matt Smith, lead oil analyst at Kpler, told Insider. "If India is taking Russian crude and blending it with other crudes and then refining it into gasoline or diesel, there's no way to separate what is made from Russian crude and what isn't. On this basis, any clean products refined in India and sent to the US could have originated from Russian crude, it is just impossible to tell."