India's oil imports from Russia hit new high in June but growth slows

According to tanker data obtained from trade sources, India’s imports of Russian oil reached an all-time high in June. However, the growth rate was the slowest since October, indicating a possible decline in India’s appetite for Russian oil.

In the aftermath of Western nations’ refusal to buy oil from Moscow due to its invasion of Ukraine, Indian refiners, being the world’s third-largest importer of Russian oil increased their purchases significantly. The raw material was made available at a discount, prompting a surge in imports by Indian refineries.

The latest data suggests that the surge in Indian imports of Russian oil might be tapering off, possibly signalling a shift in the country’s energy procurement strategy amidst geopolitical developments.

Russian oil has, however, started to lose its appeal to Indian refiners, as discounts are narrowing and problems cropped up in settling payments, forcing Indian refiners to scout for alternative sources in the Middle East.

India took nearly 2 million barrels per day (bpd) of Russian crude in June, a marginal growth from the previous month, the data showed. Prior to the Ukraine war, India rarely bought oil from Russia due to high freight costs.

In June India’s imports of Russian oil exceeded its combined purchases from Iraq and Saudi Arabia, the second- and third-biggest suppliers to New Delhi, the data showed.

The United States emerged as the fourth-largest supplier to India, relegating the United Arab Emirates to fifth place, the data showed.

In terms of market share, Russia supplied about 42% of India’s crude oil imports in April-June, the first quarter of India’s fiscal year, the data showed, while the Middle East share rose to about 41% after slipping in the previous three months.

Imports from the Middle East fell by about 34% in the June quarter from a year ago, while those from the C.I.S. nations – Azerbaijan, Kazakhstan and Russia – nearly trebled, the data showed.

Lower imports from the Middle East dragged down OPEC’s share in India’s overall crude imports.

With inputs from Reuters.