India’s Russian Oil Imports Fall From Record High as Supply Tightens
Key Takeaways
- •India’s Russian crude imports reached 2.8 million barrels per day in July, a record monthly average, and accounted for more than half of its total crude imports.
- •August imports from Russia are expected to decline to about 2 million barrels per day and then remain just above that level.
- •Ukrainian strikes on Russian export infrastructure and refineries have disrupted Russia’s ability to use and ship crude, while China has increased purchases of discounted Russian barrels.
- •Indian refiners are looking more widely for alternative supplies, including cargoes from West Africa and the Americas.
- •State-controlled Indian refiners are also seeking spot crude as term deliveries remain constrained by the Middle East crisis and Strait of Hormuz risks.
India’s crude oil imports from Russia have eased so far this month from July’s record high, as Ukrainian attacks on Russian export infrastructure and stronger competition from China for Russian barrels have reduced India’s intake of Moscow’s oil.
India’s imports of Russian crude reached a new all-time high in July and accounted for more than half of the country’s total crude oil imports. According to vessel-tracking data from Kpler, India’s Russian crude imports climbed to 2.8 million barrels per day (bpd) in July, up from the previous record of 2.7 million bpd in June, marking the highest average monthly volume on record.
In August, India’s imports of Russian crude are expected to fall to about 2 million bpd, Sumit Ritolia, Manager Modelling Refinery and Oil Markets at energy flows analytics firm Kpler, told Bloomberg on Wednesday. Ritolia said Indian purchases from Russia are likely to stabilize at just above 2 million bpd going forward.
The recent decline reflects several factors. Ukrainian attacks on Russian export infrastructure have prevented Russia from fully using crude available for export, even as Ukrainian drone strikes on Russian refineries have nearly continued on a daily basis, increasing the volume of crude available for shipment. At the same time, China has stepped up purchases of cheaper Russian crude, narrowing the amount available to Indian buyers.
For India, which relies on imports for the bulk of its oil needs, shifts in supply availability matter because refiners constantly balance price, delivery reliability, and grade availability across a wide set of suppliers. As Russian barrels become less abundant and more competition emerges, Indian buyers are broadening their sourcing options rather than depending on one origin.
As a result, Indian refiners are searching more broadly for alternative supplies, including barrels from West Africa and the Americas, to meet demand that is expected to rise in the coming months.
Indian state-controlled oil refiners are also continuing to look for spot crude cargoes, as term deliveries remain constrained by the ongoing Middle East crisis and its key oil chokepoint, the Strait of Hormuz.
In recent weeks, India’s state-run refiners have continued buying crude from West Africa as the Middle East crisis has tightened supply and made deliveries less certain.
By Tsvetana Paraskova for Oilprice.com
