Indian buyers for Russia's oil are drowning in price-cap paperwork and that could hit Moscow's sales, report says

• Indian buyers of Russian oil are struggling to handle the paperwork needed by the G7 price cap, per Bloomberg.
• The checks are slowing down transactions and threaten to drag on Moscow's crude sales to India.
• Russia's exports to India rose after sanctions forced it to find replacements for its European market.

Indian buyers for Russia's oil are drowning in sanctions-related paperwork, and that means Moscow's crude sales could take a hit, Bloomberg has reported.

Refiners in India now have to present documents to prove the Russian oil they're importing complies with the $60-a-barrel price cap imposed by the G-7 countries in December. The measures restrict providers of shipping services such as insurance from dealing with Russian cargoes priced above that level.

The checks are slowing down transactions for importers, Bloomberg reported Tuesday. Refiners have to show a pile of official invoices, contracts, and shipping and insurance documents, and get them verified — meaning they have to jump through far more hoops than before.

Typically, Indian companies don't deal with shipping services or insurance for Russian oil cargos, according to Kpler analyst Viktor Katona. Moscow bundles extra charges for those into the cost paid by the importer as delivered.

That means refiners there don't usually have to deal with demands for documentation, something they're now having to get to grips with.

The slowdown could threaten to weigh on Moscow's crude sales to India, Bloomberg said, citing executives from two-state owned processors and two banks who are familiar with the matter.

Russia's exports to India and other Asian countries like China have increased in the fallout from the Ukraine war. The oil price cap and other sanctions, meant to reduce Moscow's energy revenues for funding the war, have cut Russia off from its once-key European market.

Indian companies have seized the opportunity to snap up record amounts of Russian oil that's being offered at discounted prices, as Moscow scrambles to find replacement buyers.

The country's imports of Russian oil hit a record 1.2 million barrels a day in December, and 1.3 million barrels a day in the first two weeks of January, according to Vortexa.