Russia replaces Iraq as top oil supplier to India from Dec. 5
Russia has for the first time emerged as top oil supplier to India replacing Iraq as refiners last month snapped up oil from Moscow fearing a price cap from Dec. 5 could hit supplies and choke payment avenues, data obtained from trade sources showed.
India’s oil imports from Russia rose for the fifth straight month, totaling 908,000 barrels per day (bpd) in November, up 4 per cent from October, the data showed.
Russia overtook OPEC heavyweights Iraq and Saudi Arabia to become the largest crude oil supplier to India in October, with record shipments of
946,000 barrels per day (bpd), the Economic Times reported on Wednesday, quoting estimates from energy analytics firm Vortexa.
- Iraq’s share in Crude oil.
Before the Russian invasion of Ukraine, India was a small marginal buyer of Russian crude oil. After Western buyers started shunning crude from Russia, India became a top destination for Russian oil exports alongside China.
Indian refiners haven’t expressed hesitation to deal with Russia—their primary incentive to buy has been the much cheaper Russian oil than international benchmarks and similar grades from the Middle East and Africa.
According to Vortexa’s estimates, India—the world’s third-largest crude oil importer—shipped in a record 946,000 bpd of crude from Russia last month, up by 8% compared to September. Total Indian imports increased by 5% month on month in October, Vortexa data cited by the Economic Times showed.
Of note was that Russia surpassed both Iraq and Saudi Arabia to become the number-one crude oil supplier to India. Russian crude accounted for 22% of all Indian imports last month, while Iraq’s share was at 20.5% and Saudi Arabia’s—at 16%.
Going forward, there will be a lot of uncertainties among buyers over Russia’s oil exports when the EU embargo enters into force on December 5.
Indian Oil Corporation and Bharat Petroleum Corporation Limited (BPCL), two of the biggest state-owned importers of Russian crude oil in India, have reportedly stopped looking for spot Russian crude oil supply set to arrive after December 5, as they await more clarity on the EU sanctions regime ahead of the deadline, including on the possibility of secondary sanctions on buyers of Russian crude.
India will also further diversify its oil imports to better prepare for future OPEC+ production cuts that raise oil prices and tighten supply, its Petroleum Minister Hardeep Singh Puri said last month.
