According to industry figures, India’s import of cheap Russian oil reached a new high in May, surpassing the total amount purchased from Saudi Arabia, Iraq, the United Arab Emirates, and the United States.
According to data from energy cargo tracker Vortexa, India took 1.96 million barrels per day from Russia in May, 15% more than the previous high in April.
Russia now accounts for roughly 42% of all crude oil purchased by India in May. This is the highest percentage for a single country in recent years.
The increase in Russian market share occurred at the expense of traditional Middle Eastern suppliers. According to the shipping analytics firm, Saudi Arabian shipments fell to 560,000 tonnes, the lowest level since February 2021.
In May, the oil producer cartel OPEC’s proportion of India’s oil imports plummeted to an all-time low of 39%.
At one point, the Organisation of Petroleum Exporting Countries (OPEC), primarily in the Middle East and Africa, accounted for up to 90% of all crude oil imported by India, but this has been declining since Russian oil became available at a discount in the aftermath of Moscow’s invasion of Ukraine in February last year.
Russia remained India’s single largest crude oil supplier for the ninth consecutive month, accounting for 42% of total oil imports.
Refineries transform crude oil into fuel and diesel.
Russia’s imports now exceed those of Iraq and Saudi Arabia, India’s largest suppliers in the last decade, as well as the United Arab Emirates and the United States.
In May, Iraq supplied 0.83 million barrels per day (bpd), while the UAE shipped 203,000 bpd. According to the data, the US supplied up to 138,000 bpd.
Russia’s market share in India’s import basket increased from less than 1% before the commencement of the Russia-Ukraine crisis in February 2022 to 1.96 million barrels per day in May, accounting for 42% of total imports.
OPEC contributed 1.8 million barrels per day (bpd) of the 4.7 million barrels per day (bpd) of oil purchased by India in May. According to Vortexa, this was a decrease from the 2.1 million bpd imported in April.
owing to expensive freight costs, Indian refiners rarely acquired Russian oil in the past, but today they are snatching up copious Russian cargo available at a discount to other grades, as some Western nations refused it owing to Moscow’s invasion of Ukraine.
In May, Russia purchased more than double the 0.83 million bpd of oil purchased from Iraq, which had been India’s main oil supplier since 2017-18. Saudi Arabia has dropped to third place.India’s imports of Russian crude oil continue to reach record highs, surpassing about 2 million barrels per day in May.
Refiners have tested and developed confidence in processing Russian crude, and their ravenous demand for “Russian crude is likely to grow as much as they have room to back off spot crude purchases,” according to Serena Huang, Vortexa’s Asia-Pacific analyst.
In April, the average cost of Russian crude, including freight charges, landing on Indian coasts was USD 68.21 per barrel, the lowest level since the Ukraine conflict. In April, the average price of Saudi crude shipped to India was USD 86.96 per barrel, while Iraqi oil was valued at $77.77 per barrel.
The import price for May has not yet been disclosed.
Russia is supplying record amounts of crude oil to India to fill the void left by the European Union’s December ban on imports.
The EU banned Russian seaborne oil in December and imposed a $60-per-barrel price cap, preventing other countries from accessing EU shipping and insurance services unless oil is sold below the cap price.
According to industry sources, Indian refiners are using the UAE dirham to pay for oil imports for less than $60 per barrel.
In March 2022, India imported only 68,600 bpd of oil from Russia, according to Vortexa.
