India grabbed Russian oil which was available at a discount after some in the West shunned it as a means of punishing Moscow. File | photo credit: Reuters
India’s crude oil imports from Russia hit a record 1.6 million barrels a day in February and are now higher than the combined imports from traditional suppliers Iraq and Saudi Arabia.
Russia remained the largest supplier of crude oil, which is converted into gasoline and diesel at refineries, for a fifth consecutive month supplying more than a third of all oil imported by India, according to the tracker of Vortexa energy freight.
Refiners continue to buy plentiful Russian cargoes available at a discount to other grades.
From a market share of less than 1% in India’s import basket before the start of the Russian-Ukrainian conflict in February 2022, Russia’s share of India’s imports has increased to 1, 62 million barrels per day in February, taking a 35% share.
India, the world’s third-largest crude importer after China and the United States, grabbed Russian oil that was available at a discount after some in the West shunned it in order to punish Moscow for its invasion of India. Ukraine.
The increase in Russian imports came at the expense of Saudi Arabia and the United States. Saudi oil imports fell 16% month-on-month and those from the United States fell 38%.
According to Vortexa, Russia now accounts for more than the combined oil bought from Iraq and Saudi Arabia – India’s main oil suppliers for decades.
Iraq, which Russia ousted to become India’s biggest oil source, supplied 9,39,921 barrels of oil per day (bpd) in February, while Saudi Arabia supplied 6,47,813 bpd of petroleum.
The United Arab Emirates overtook the United States to become the fourth supplier with 4,04,570 bpd. The United States supplied 2,48,430 bpd, compared to 3,99,914 bpd in January.
Supplies from Iraq and Saudi Arabia are at their lowest in 16 months.
“Indian refiners are benefiting from increased refining margins from processing discounted Russian crude,” said Serena Huang, head of Asia-Pacific analysis at Vortexa.
“Refiners’ appetite for Russian barrel imports should remain robust as long as economic conditions are favorable and financial and logistics services to support trade are available.” Russia is selling record amounts of crude oil to India to fill its energy export shortfall after the European Union banned imports in December.
In December, the EU banned Russian oil transported by sea and imposed a price cap of $60 a barrel, which prevents other countries from using EU transport and insurance services, unless oil is sold below the cap.
Industry officials said Indian refiners used the UAE dirham to pay for imported oil at a price below $60.
“Nearly a quarter of Russian imports are now paid for in dirhams,” an official said.
From a market share of just 0.2% in India’s import basket before the start of the Russian-Ukrainian conflict, Russia’s share of India’s imports rose to 35% in February 2023.