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Published: Mar 06, 2023
Updated: Mar 06, 2023

India's Russian Oil Imports Hit Record High, Surpassing Saudi and Iraq

India's imports of crude oil from Russia hit a new high in February 2023, reaching 1.6 million barrels per day. This is now higher than the combined imports from traditional suppliers Saudi Arabia and Iraq.

Russia Emerges as India's Largest Oil Supplier

Russia has become India's largest supplier of crude oil for the fifth straight month, accounting for over one-third of all oil imported by India, according to energy cargo tracker Vortexa. Russian oil is being sold at a discount compared to other grades, and Indian refiners have been eager to purchase it.

Rise in Russian Imports at the Expense of Saudi Arabia and the United States

The rise in Russian imports has been at the expense of Saudi Arabia and the United States, whose imports have declined by 16% and 38%, respectively. Iraq, which was India's largest oil source before Russia, has now been toppled by Russia.

UAE Becomes India's Fourth-Largest Supplier

UAE has now become India's fourth-largest supplier at 4,04,570 bpd, surpassing the United States.

Boost in Refining Margins for Indian Refiners

Indian refiners are enjoying a boost in refining margins from processing discounted Russian crude. Refiners' import appetite for Russian barrels is likely to remain robust as long as the economics are favourable, and financial and logistical services to support the trade are available.

Impact of EU Ban on Russian Oil Exports

Russia is selling record amounts of crude oil to India to plug the gap in its energy exports after the European Union banned imports in December. The EU banned Russian seaborne oil and imposed a USD 60-per-barrel price cap, which prevents other countries from using EU shipping and insurance services, unless oil is sold below the cap.

Indian Refiners Using UAE's Dirham to Pay for Oil

Indian refiners are reportedly using UAE's dirham to pay for oil imported at a price lower than USD 60.

Highlights that India emphasises on Keeping domestic populace happy despite pressure from the Western Nations

India's increasing reliance on Russian oil imports marks a significant shift in the country's oil trade. While the country has traditionally relied on Saudi Arabia and Iraq for oil, the availability of discounted Russian oil has led to a shift in trade relations. The future of India's oil imports will depend on the economics and availability of trade, as well as geopolitical factors in the region.