India’s Russian oil imports rise to nine-month high in April
India’s Russian oil imports rose a nine-month high in April after shipments on non-sanctioned tankers operated by Russia’s largest shipping company Sovcomflot resumed, tanker data obtained from shipping and trade sources showed.
Refiners in India briefly stopped importing Russian oil in tankers belonging to Sovcomflot after the company’s ships, along with its 14 tankers, were designated by Washington in February as being in breach of Western sanctions.
The West has imposed the sanctions against Russia since it invaded Ukraine in 2022 and has enacted price caps on oil and oil products loaded at Russian ports aimed at cutting Moscow’s oil revenue that funds the war.
India, the world’s third-biggest oil importer and consumer, is the top client for Russian seaborne oil.
In April, the first month of the fiscal year 2024/25, Indian refiners shipped in nearly 1.8 million barrels per day (bpd) of Russian oil, up about 8.2% over the previous month, expanding Russia’s share in India to about 38% from 32% in the previous month, the data showed.
Overall, India imported 4.8 million bpd of oil in April, a decline of 6.5% from the previous month and marginally higher than April 2023. Russia continued to be the top oil supplier to India followed by Iraq and Saudi Arabia.
However, increased purchases of Russian oil dented Indian refiners’ overall purchase of Iraqi and Saudi Arabian oil during the month, dragging down the share of Middle Eastern oil to 41% from 46% in March, the data showed.
Lower imports from the Middle East further reduced the Organization of the Petroleum Exporting Countries’ share in India’s crude basket to 46% in April from 53% in March, the data showed.
Higher imports of Russian oil boosted the share of oil from the Commonwealth of Independent States, comprising Kazakhstan, Azerbaijan and Russia, in India’s imports to 41% last month from 37% in March.
India’s Reliance Industries Ltd raised its January oil imports from Russia by about 48% to nearly 335,700 barrels per day (bpd), data from industry and trade sources showed. The private refiner imported about 1.4 million bpd of oil in January, up 45% from a low base in the previous month, the data showed.
Reliance has significantly increased the processing of discounted Russian oil after some Western companies and countries shunned purchases from Moscow following its invasion of Ukraine.
India paid the highest prices for Russian oil in October since the price cap was imposed, providing a boost to Moscow’s revenues despite efforts by western nations to curb the producer’s income and funding for the Ukraine war.
India, the world’s third-biggest oil importer and consumer, has emerged as the biggest buyer of seaborne Russian crude as western nations cut purchases after Moscow’s invasion of Ukraine more than a year ago.
India purchased Russian oil at an average price of about $81.24 per barrel in September, according to Reuters’ calculations based on the latest data posted on the Indian Trade Ministry’s website.
India’s intake of Russian oil could rise on softening prices, a government official said last week.
The price of Russia’s flagship grade Ural in Baltic ports has plunged since late November below the $60/barrel ceiling.
New Delhi wants to cut its crude import bill and the average cost of Russian oil is lower than that from Iraq and Saudi Arabia, the second and third-biggest oil suppliers to India.
The price of a barrel of oil from Iraq and Saudi Arabia in October averaged $85.97 and $98.77, respectively, the data showed. Apart from direct supplies from Russia, Indian refiners also get Russian oil supplied from ports in Greece, Spain and Korea.
Refiners in India largely buy Russian oil on a delivered basis, with sellers arranging for shipping and insurance.
Adherence to the G7-fixed ceiling allows the use of Western services such as shipping and insurance in transactions involving Russian oil. The Indian government data does not specify freight, insurance, or other charges paid by Indian refiners but it is significantly higher than the $60 per barrel price cap.