Highlights
- The government has defended India’s purchase of Russian oil on multiple occasions in the past
- Some analysts feel India’s imports from Russia could slow down from December onward due to shipping constraints
- Russia accounted for 22% of India’s total crude imports in October
Amidst its ongoing war with Ukraine, Russia has become the top oil supplier for India, edging past the traditionally dominant suppliers Saudi Arabia and Iraq according to the data from energy intelligence service firm Vortexa, whose data and analytics are used by physical and financial energy traders and analysts to identify and capture opportunities in the market.
Russia supplied 946,000 barrels per day of crude to India last month, i.e., in October, which is the highest ever in a month.
Russia accounted for 22% of India’s total crude imports in October, ahead of Iraq’s 20.5% and Saudi Arabia’s 16%. Compared to September, overall crude imports went up 5% in October, and those from Russia rose 8%, according to Vortexa, which tracks oil and gas tankers across the globe and provides freight and inventory analytics.
For the first time, India imported more seaborne Russian crude than the European Union—the volumes were 34% higher than the EU’s. With imports of 1 million barrels per day in October, China remained the largest buyer of Russian seaborne crude, as per the ET report.
India also imported about 106,000 barrels per day of fuel oil from Russia in October, which again, is a new high. The dramatic rise in Russia’s share of the Indian market from less than 1% in 2021 to 22% now has reportedly been triggered by the deep discounts that followed the February invasion of Ukraine.
What India’s Oil Minister Said
“If India did not buy or someone else didn’t buy Russian oil, and Russian oil was to go off the market, what would happen to International prices?”Oil Minister Hardeep Puri reportedly told CNN earlier this week, adding that the market disruption could send prices to $200 per barrel. He said India will buy oil and gas from wherever it can, as the government has a “moral duty” to keep its population supplied with energy.
The latest data from the oil ministry shows that the share of Eurasia, including Russia, Kazakhstan, and Azerbaijan, has expanded to 21% in the April-September period from 5% a year earlier. This has led to a near halving of the combined share of North America, South America, and Africa to 18% from a year earlier, while the Middle East’s share remained almost intact at around 59%.
The government has defended India’s purchase of Russian oil on multiple occasions in the past, the report mentioned.
Earlier in September, people in the know said that since the Russia-Ukraine war began in February this year, India is estimated to have gained Rs 35,000 crore by importing Russian crude at discounts, as per a TOI report.
Oil Imports From Russia To Slowdown From December?
The war and the consequent Western sanctions unsettled the global market and sent prices higher but forced Russia to sell its crude at a deep discount.
Some analysts feel India’s imports from Russia could slow down from December onward due to shipping constraints that could possibly emerge from the West’s proposed price cap on Russian oil, as per an ET report.
“There remains much uncertainty on whether Russian crude deliveries can be sustained at this level post the December 5 EU ban, with the availability of ice-class tankers to transport crude from the Russian Baltic ports being one of the biggest constraints,” said Serena Huang, an analyst at Vortexa.
