India imported 738,024 barrels per day (bpd) of Russian crude oil in August, 18% lower than in July and 24.5% less than in June, according to Vortexa. China‘s imports of seaborne crude oil from Russia, however, remained largely stable during this period. India’s overall crude oil imports fell to 4,049,167 bpd in August, 13% lower than in July and 15% lower than in June.
Russian crude oil remains more attractive than other grades, even as the discounts for Indian importers have almost halved to $5-6 per barrel on a delivered basis, which augurs well for import of the commodity, especially in view of the looming European Union ban on imports of Russian crude oil. Refineries in India usually maintain a balance in their purchase by sourcing different grades of crude oil from multiple sources.
Russia’s Share Drops to 18.2%
“Since May, we have seen Russian crude imports into India making up around 20% of the country’s total crude imports, displacing conventional supplies from the Middle East, West Africa, and the US. I definitely see room for more Russian crude heading to India in the coming months, as the EU ban on Russian crude imports draws near,” said Serena Huang, an analyst at Vortexa.
Overall crude oil imports too may quickly go back to the previous levels amid robust demand for refined fuels, said analysts.
In August, Russia slipped one notch to the third spot among the largest crude oil exporters to India, while Saudi Arabia climbed two spots to become the top exporter to India, toppling Iraq for the first time in a year. Saudi Arabia had a 20.8% market share in India in August, followed by Iraq (20.6%) and Russia (18.2%).
Crude oil imports from Iraq and the UAE fell 18% and 20% respectively in August from July while supplies from Saudi Arabia and the US shrank 3% and 7% respectively.
China imported 1,083,315 bpd of seaborne Russian crude oil in August, 3.5% higher than in July and 3% lower than in June. China is also a big consumer of Russian crude oil received by pipeline.
Since the outbreak of the Ukraine war, India has snapped large quantities of Russian crude oil, making use of the deep discounts available on it at a time when high prices are hurting economies across the world.
Europe has been planning to shut most of the Russian oil imports from December, which could make more supplies available to India and China.
The West has been pressuring India to cut imports of Russian oil and the US has also proposed a price cap on it with an aim to cut energy revenues for Moscow. Indian officials and industry executives feel implementing the price cap would have many challenges.
Russian crude oil loading for exports rose 10% in a month to 3,505,980 bpd in August. Of this, about 600,000 bpd was headed for India and 800,000 bpd for China.