India’s appetite for Russian crude oil surged multi fold, from less than 1 per cent before February 2022 to 21 per cent in October, with the world’s third largest energy consumer importing almost 1 million barrels per day.
From a market share of less than 1 per cent in India’s import basket before the start of the Russia-Ukraine conflict, Russia’s share of India’s imports rose to 4.24 million tonnes, or nearly 1 million barrels per day, in October, taking a 21 per cent share comparable to that of Iraq and higher than Saudi Arabia’s share of around 15 per cent in the country’s import basket in the same month, S&P Global data showed.
Shreyans Baid, a senior oil analyst for South Asia at S&P Global Commodity Insights, said since the voyage time to India from Russian ports ranges from 2-5 weeks, the crude that arrived in October must have been purchased months in advance.
“But future purchases of Russian crude by Indian refiners will depend on how the EU ban shapes up the seaborne trade and whether Russian crude make economic sense given high freight rates and the market structure,” he added.
India’s appetite for Russian crude in October rose to levels not seen in recent years and surpassed volumes shipped by leading West Asian suppliers, as refiners rushed to snap up plentiful cargoes ahead of any potential shipping or policy hurdles once the EU’s sanctions kick in.
“As refineries start up from planned maintenance schedules, Indian crude imports have seen a jump in October and are likely to stay healthy in upcoming months. Despite the jump in Russian crude inflows, overall, the Middle East as a region still remains the largest supplier of crude to India, with a combined share of close to about 55 per cent,” Baid said.
The rising share of Russian crude sales to India has also taken a toll on the country’s appetite for African crudes. This, combined with a tighter market structure as well as increased volatility in freight markets have led to the share of West African crudes dropping from 12.5 per cent in January-September 2021 to 8.4 per cent in the same 2022 period.