New Delhi: As New Delhi’s crude oil imports increased 18.5% from August after declining for two months, Russia overtook Saudi Arabia as India’s second-largest crude oil supplier in September, according to ET, which quoted cargo tracker Vortexa data.
India imported 879,000 barrels per day (bpd) of Russian crude oil in September, which is the second-highest monthly total ever behind June’s 933,000 bpd.
Serena Huang, an analyst at Vortexa, told the financial daily: “India may consider importing more Russian crude this quarter as refiners ramp up runs to meet the seasonal rise in domestic demand and higher export demand from Europe, but it all hinges on prices of Russian crude offered to them relative to the rival Middle East and West African grades.”
More significantly, imports from Russia were just 1% before the attack on Ukraine because freight was expensive, but they are now 21%. After the war started, merchants offered steep discounts, which later decreased to approximately $5–$6 per barrel on a delivered basis, increasing refiners’ thirst for Russian crude.
Since Moscow’s invasion of Ukraine in February, the Center has taken the risky move of increasing its imports of Russian oil at a discount in an effort to reduce import costs. India is the third-largest importer and consumer of oil worldwide.
Increased imports from Russia significantly reduced market share for other major suppliers like the US, Iraq, and the UAE. Saudi Arabia became India’s top supplier last month, with Iraq and the UAE coming in at number three and four, respectively. The US, the fifth-largest provider, currently holds 4% of the Indian market, down from 10% a year earlier.
India increased its purchases of Russian refined goods, with September’s imports of fuel oil coming in at almost 100,000 bpd, up from an average of just under 60,000 bpd in the first quarter of 2022. Additionally, according to Vortexa, India received its first 90,000 tonnes of Russian naphtha cargo at Sikka port last month.
“With a slowing appetite for Russian oil in Europe, and limited alternative destinations, India is becoming an increasingly important trade partner for Russia,” the publication quoted Huang as saying.
