MOSCOW/NEW DELHI, Aug 18 (Reuters) - Spot discounts for Russian crude for September loading have started to deepen as India, a key customer of Moscow, reduces purchases due to high prices and maintenance outages at some refineries, four traders and Indian refinery officials said.
India is the top buyer for Russian Urals crude this year and slowing demand from the world's third-largest importer could push more supply to China instead.
Spot discounts for September loading of Russia's flagship grade Urals for delivery at Indian ports have widened to about $6 per barrel from an average $5 for August, the trade sources said.
However, Indian refiners are waiting for discounts to widen to at least $7 per barrel, sources at three state refiners said.
"We have not placed a request for September cargoes as the discount is not attractive ... it is still below $7 per barrel," a refinery official said.
Two traders said discounts are unlikely to widen further.
Prices for Russian oil jumped for August barrels following Moscow's pledge to cut exports as a part of the OPEC+ deal, cooling demand from Indian buyers.
India's top refiner and a key buyer of Russian oil, Indian Oil Corp (IOC), is staying away from the spot markets for Russian oil and is meeting most of its demand through supplies in its term contract, a separate source said.
The traders and the refinery sources declined to be named as they are not authorised to speak to media.
IOC did not immediately respond to a request for comment.
At least two Indian refiners, Mangalore Refinery and Petrochemical Ltd and Reliance Industries, have scheduled maintenance on plants during September, which would cut their crude purchases.
MRPL Managing Director Sanjay Varma told Reuters that his company would cut purchases this month and next due to a maintenance outage for about 40 days at a 60,000 barrels per day crude unit.
Reliance is shutting half of its export-focused 704,000 bpd plant for maintenance.
In China, some big private refiners, which earlier in the year bought Urals supplies, are looking at buying September-loading cargoes via state traders as intermediaries, said a trader familiar with the situation.
"These big private refiners buy mostly non-sanctioned oil, but still, Urals are about $6-$8 dollar cheaper (for delivery at Chinese ports)," the trader said.
Despite widening discounts, the calculated Urals oil price remains above the $60 per barrel price cap applied by the Group of Seven countries (G7) and the West.
As of Thursday, calculated Urals oil price on FOB basis in Baltic ports was close to $66 per barrel given the cost of freight and additional costs of $2 per barrel.
"There is a risk associated with purchase of Russian oil. We are making purchases two months in advance and if there are more sanctions we will not get the cargoes ... so we want good discounts," said the Indian refinery official. (Reporting by Nidhi Verma, Reuters reporters in Moscow and Chen Aizhu in Singapore; Editing by Simon Cameron-Moore)
