India's imports of crude oil from Russia reached a record high of 1.6 million barrels per day, surpassing the sum of imports from its two main suppliers, Iraq and Saudi Arabia. According to energy cargo tracker Vortexa, Russia maintained its position as the sole major supplier of crude oil, which is refined into gasoline and diesel at refineries, for a fifth consecutive month by providing more than one-third of all the oil India purchased.
Refiners keep buying up numerous Russian shipments that are priced lower than other grades. Russia's market share in India's imports increased to 1.62 million barrels per day in February, taking 35% of the market from less than 1% at the commencement of the Russia-Ukraine conflict in February 2022. India, the third-largest crude importer in the world after China and the United States, has been snatching up Russian oil that was on sale after some in the West avoided it as retaliation for Moscow's invasion of Ukraine.
The United States and Saudi Arabia have suffered as a result of the increase in Russian imports. Saudi Arabian oil imports decreased 16% month over month.
According to Vortexa, Russia now accounts for more than the combined oil bought from Iraq and Saudi Arabia India's mainstay oil suppliers for decades. Iraq, whom Russia has toppled to become the largest oil source for India, supplied 9,39,921 barrels per day (bpd) oil in February while Saudi supplied 6,47,813 bpd oil. UAE overtook US to become the fourth largest supplier at 4,04,570 bpd. The US supplied 2,48,430 bpd, down from 3,99,914 bpd in January.
Iraq and Saudi supplies are the lowest in 16 months. "Indian refiners are enjoying a boost in refining margins from processing discounted Russian crude," said Vortexa's head of Asia-Pacific analysis, Serena Huang. "Refiners' import appetite for Russian barrels are likely to remain robust as long as the economics are favourable, and financial and logistical services to support the trade are available."
In order to fill the vacuum in its energy exports after the European Union prohibited imports in December, Russia is selling record amounts of crude oil to India. Other nations are not permitted to use EU shipping and insurance services unless oil is sold below the cap, which was set by the EU in December along with a ban on Russian seaborne oil and a USD 60 per barrel pricing cap.
Industry insiders claimed that Indian refineries are utilising UAE's dirham to pay for imported oil that costs less than USD 60. An official stated, "About a quarter of the Russian imports are now paid in dirham. Russia's market share in India's imports increased to 35 percent from 0.2% before the start of the crisis between Russia and Ukraine.
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