Why Russia Will Continue to Be India’s Top Crude Oil Supplier: Insights from Industry Analysts

India’s imports of crude oil from Russia dipped slightly in September but still made up over one-third of the country’s total oil purchases. This comes despite pressure from the U.S. to limit trade due to concerns about supporting Russia’s actions in Ukraine. In September, India imported approximately 4.7 million barrels of oil per day, marking a small increase from the previous month.

Russian oil remains the top source, accounting for around 1.6 million barrels per day, which is about 34% of India’s total imports. However, this figure is down by about 160,000 barrels compared to earlier in the year, according to data from Kpler, a global trade analytics firm.

Sumit Ritolia, a lead research analyst at Kpler, explains that Russian crude offers better profit margins and prices, making it an appealing option for Indian refiners. Iraq and Saudi Arabia follow Russia as India’s leading oil suppliers, with imports of around 881,115 and 603,471 barrels per day, respectively.

After the Ukraine war began in 2022, Russia quickly became a major supplier for India, taking over from traditional sources like Iraq and Saudi Arabia. As Western nations pulled back from buying Russian oil, they offered significant discounts to attract buyers like India. This shift saw Russia’s share of India’s oil imports jump from less than 1% to over 40%.

Despite ongoing global tensions, there haven’t been formal sanctions against purchasing Russian crude oil, which is critical as it’s refined into fuels like petrol and diesel. Interestingly, U.S. policies under past administrations have attempted to sway India away from Russian oil, including threats of tariffs on Indian imports.

Looking ahead, Ritolia anticipates that Russian oil will remain a key player in India’s imports, even as the country works on diversifying its sources. He believes that Russian imports may stay steady or even increase slightly in the last quarter of the year.

Supply chain logistics are complex, and many contracts for oil are signed months in advance. This makes it challenging for Indian refiners to quickly replace Russian oil. They are gradually seeking more diverse sources, but for now, Russian crude remains central to India’s energy strategy.

As India prepares for increased fuel demand during the festive season, Russian oil will likely continue to be a significant part of the mix, providing necessary supplies at competitive prices.

For more detailed insights on India’s energy policies and international relations, check out this analysis from the International Energy Agency.

Source link

INDIA CRUDE OIL IMPORTS FROM RUSSIA, RUSSIA CRUDE OIL, RUSSIA UKRAINE WAR, RUSSIA, RUSSIA TO REMAIN INDIA'S NO 1 CRUDE OIL SUPPLIER: ANALYSTS