Indian refiners have been taking advantage of discounted Russian oil following Western sanctions on Moscow and a decrease in energy imports from Russia due to its invasion of Ukraine.
In July, India overtook China to become the world’s largest importer of Russian oil, according to recent import data. This shift happened as Chinese refineries reduced their oil purchases due to diminishing profit margins from fuel production. Russian crude oil accounted for a record 44% of India’s total oil imports in July, reaching an unprecedented 2.07 million barrels per day (bpd). This marks a 4.2% increase from June and a 12% rise compared to the same period last year. In contrast, China imported 1.76 million bpd of Russian oil, including both pipeline and shipment supplies, as reported by Reuters.
This change highlights India’s growing dependence on Russian crude, driven by the economic benefits and strategic decisions of Indian refiners. The rise in imports reflects a shift in global energy trade dynamics, with India emerging as a significant player in the oil market. Indian refiners have been taking advantage of discounted Russian oil, following Western sanctions against Moscow and reduced energy purchases in response to Russia’s invasion of Ukraine.
India’s trade with Russia has increased significantly since the onset of Russia’s war against Ukraine in February 2022, primarily due to increased imports of oil and fertilizers, which has helped stabilize global prices and control inflation.
India’s imports of ESPO Blend crude, traditionally favored by Chinese buyers, have also surged. In July, imports of ESPO crude to India reached 188,000 bpd, facilitated by the use of larger Suezmax vessels. This marks a significant shift, as refineries in northeast China, once the main consumers of ESPO, have reduced their demand due to sluggish fuel consumption.
Despite the rise in imports from Russia, Iraq remained India’s second-largest oil supplier in July, followed by Saudi Arabia and the United Arab Emirates. Additionally, India’s crude oil imports from the Middle East rose by 4% in July, increasing the region’s share of India’s overall oil supply to 40%, up from 38% in June.
