India's Russian oil imports soar, outshining middle east suppliers

New Delhi, June 04: India's import of Russian oil reached a new record in May, surpassing the combined oil purchases from Saudi Arabia, Iraq, UAE, and the US, according to industry data. Data from energy cargo tracker Vortexa shows that India imported 1.96 million barrels per day from Russia in May, a 15 per cent increase from the previous high in April.

Russia's share of India's crude oil imports now stands at nearly 42 per cent, marking the highest share for an individual country in recent years.

The rise in Russia's share comes at the expense of traditional suppliers in the Middle East, with shipments from Saudi Arabia reaching their lowest level since February 2021. OPEC's share in India's oil imports also dropped to an all-time low of 39 per cent in May. The dominance of Russian oil in India's imports has been on the rise since the availability of discounted Russian crude following Moscow's invasion of Ukraine in February last year.

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For the eighth consecutive month, Russia remains the largest supplier of crude oil to India, accounting for 42 per cent of all oil imports. This surge in imports from Russia has surpassed the combined purchases from Iraq, Saudi Arabia, UAE, and the US.

Indian refiners, who previously purchased Russian oil sparingly due to high freight costs, are now taking advantage of the discounted prices and increased availability. The average cost of Russian crude, including freight costs, landed on Indian shores in April, was at the lowest level since the Ukraine war.

While Iraq had been India's top oil supplier since 2017-18, the imports from Russia in May were more than double the oil bought from Iraq. Saudi Arabia has been pushed down to the third spot as Russia's dominance in India's oil imports continues to grow. The import price for May has not yet been released.

Industry officials suggest that Indian refiners are using the UAE's dirham to pay for oil imported at a price lower than the USD 60-per-barrel price cap imposed by the European Union (EU) on Russian seaborne oil. The EU ban on imports and the price cap have led Russia to focus on selling record amounts of crude oil to India to compensate for the gap in its energy exports.

In March 2022, India imported only 68,600 barrels per day of oil from Russia, highlighting the significant increase in imports since the Russia-Ukraine conflict began in February 2022.

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- With inputs from agencies

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