Russia Surges to 4th Place as Oil Supplier to India

By Nidhi Verma

NEW DELHI – In April, Russia emerged as the fourth-largest oil supplier to India, with expectations of increased volumes in the upcoming months as low prices fuel demand from the world’s third-largest oil consumer and importer, according to tanker tracking data.

Russia’s share in India’s oil imports reached a historic high of 6%, translating to approximately 277,000 barrels per day (bpd) in April, a significant increase from about 66,000 bpd in March, when Russia held the tenth position. This data was provided by trade sources.

Indian Oil Corp., the country’s leading refiner, procured its first-ever cargo of Russian Arco oil last month.

Western sanctions imposed on Russia due to its invasion of Ukraine have created a unique opportunity, encouraging Indian refiners to boost their purchases of discounted Russian oil, which has been largely abandoned by numerous Western countries and companies.

Ehsan Ul Haq, an analyst with Refinitiv, stated that the prices of Russian Urals crude plummeted because of the sanctions, while Kazakhstan’s CPC blend crude faced pressure since it is loaded from a Russian port. He noted that Indian buyers capitalized on discounted Russian oil, while some European buyers shifted their focus toward higher quantities of oil from Africa and the U.S.

In April, the proportion of African oil in India’s total imports fell to approximately 6%, down from 14.5% in March, and U.S. oil imports nearly halved to 3%. Combined, oil from Azerbaijan, Russia, and Kazakhstan accounted for about 11% of India’s imported oil in April, compared to around 3% in March. Meanwhile, Middle Eastern oil’s share rose to 71%, up from 68%.

Preliminary data suggests that India’s oil imports from Russia are projected to rise to around 487,500 bpd in May, as refiners continue to increase their purchases.

In April, Iraq maintained its position as the top oil supplier to India, followed by Saudi Arabia and the United Arab Emirates.

Overall, Indian refiners imported 4.7 million bpd of oil in April, reflecting a 6.9% increase from the previous month and an 11.6% rise compared to a year earlier, when oil demand was impacted by a second COVID-19 wave.

The elevated oil imports were attributed to refiners ramping up production to satisfy local demand and capitalize on favorable refining margins. Additionally, companies secured Russian grades at highly attractive prices while also fulfilling their contractual obligations with Middle Eastern suppliers.

The rise in imports from Russia contributed to a decline in OPEC’s share of India’s foreign oil supplies in April.