India’s crude imports from Russia up for second straight month in February

India’s crude oil imports from Russia appreciated for the second consecutive month in February hitting 1.54 million barrels per day (mb/d), accounting for around 33 per cent of the cumulative inbound shipments, aided by rising supply of Urals.

According to energy intelligence firm Kpler, India’s crude oil imports from Russia rose marginally by 0.7 per cent M-o-M. However, on an annual basis, the shipments fell by more than 16 per cent from 1.84 mb/d clocked in February 2023.

Russia’s flagship grade, Urals, which accounts for a major part of oil cargoes from the erstwhile Soviet Union, also rose for the second consecutive month in February. The cargoes rose 12 per cent M-o-M to 1.195 mb/d, but declined by 3 per cent Y-o-Y.

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Viktor Katona, Kpler’s Lead Crude Analyst, told businessline: “Indian imports of Russian crude came in at 1.54 mb/d in February, some 50,000 barrels per day (kb/d) higher compared to January and marking the second straight M-o-M increase for India’s refiners.”

Overall, India’s crude oil imports stood at around 4.7 mb/d in February 2024, against 4.8 mb/d in January 2024 and 4.4 mb/d in December 2023.

Urals shipments grow

India being by far the largest buyer of Urals globally, the flow of the medium sour grade has been remarkably consistent over the past six months, trending around 1.1-1.2 mb/d, he added.

“In February, it (Urals) moved to the upper limit of that range, the highest import figure since October (2023) for Urals,” Katona explained.

Shipments from Russia continued via the Red Sea route without any major issues.

“The past months’ consistent figure of 1.5 mb/d Indian imports passing through Red Sea remains unchanged, despite widespread Red Sea diversions, supply into India sees no change. All of this is coming from Russia flows that have found a new equilibrium in the 1.5-1.6 mb/d range. Urals deliveries to India are trending sideways around 1.1-1.2 mb/d, minimal change from one month into another,” Katona explained.

India also imported 97,229 barrels per day (b/d) of Sokol in February, after the world’s third largest crude oil importer did not procure any cargoes of the light sweet crude grade during December 2023 and January 2024.

“When it comes to Sokol, the main point of contention between Indian buyers and Russian sellers lately, there were four delivered Sokol cargoes from Sakhalin totalling 100,000 b/d, however not a single one to the usual buyer, Indian Oil Corporation (IOC).

“Hindustan Petroleum Corporation (HPCL) bought three of those, two into Visakhapatnam and one into Mumbai, whilst the remaining one went to Nayara (Energy). Before February, the last Sokol delivery was on November 23, 2023, so there’s a partial recovery in flows after the IOC-Rosneft standoff,” Katona said.

More supplies in March

When asked about the impact of sanctions on Russia by the US and drone attacks on Russian refineries, Katona said the drone strikes on refineries have first and foremost curbed domestic refinery runs leaving Russian exporters with more crude to export into international markets.

“That is still yet to happen because it takes time until the barrels reach export terminals from producing oil fields in Siberia, however we expect March exports to be strong, especially considering (Russia) only needs to start cutting production along its OPEC+ voluntary commitments from Q2 (April-June 2024) onwards. Seeing the February exports from Russian ports, assuming they mostly arrive in India across March, I see the same 1.1-1.2 mb/d of exports on the Urals side, so that side of the equation looks robust,” he added.