Russia continues to dominate India’s oil imports in July, Saudi Arabia recovers from June lows
- Indian refiners imported 2.08 million barrels per day (bpd) of Russian crude oil in July, this is the highest since June last year
Highlights:
- India’s Russian oil imports stayed robust in July, registering a slight month-over-month growth to the highest level in over a year
- This is powered by strong flows of Moscow’s key crude grade Urals and an uptick in import of ESPO crude
- Indian refiners imported a total of 2.08 million barrels per day (bpd) of Russian crude oil in July, the highest since June of last year
- India’s Russian oil imports in July were around a per cent higher sequentially, and accounted for as much as 43 per cent of India’s total oil imports of 4.82 million bpd.
- Russia’s share was almost as much as the cumulative market share of the next four large suppliers Iraq, Saudi Arabia, the United Arab Emirates (UAE), and the United States (US).
- The rise in India’s import of discounted Russian oil over the past few months has hit flows from Saudi Arabia the most.
- In June, import volumes from Riyadh had fallen to the lowest monthly level in over a decade.
- July saw some recovery from those lows, with flows from the West Asian supplier touching a four-month high.
- According to industry watchers, Urals has a price advantage of over $5 per barrel over Saudi Arabian medium-sour grades.
- Urals, a medium-sour crude, is the mainstay of India’s Russian oil imports.
- India’s Urals import volumes for the months accounted for over 68 per cent of New Delhi’s total oil imports from Moscow.
- Evidently, the price differential between Urals and competing crude grades from India’s traditional West Asian suppliers was significant enough for Indian refiners to prefer the Russian grade.
- Oil import volumes from Iraq, India's second-largest source of crude oil in July were flat sequentially at 0.80 million bpd, accounting for 16.5 per cent of India’s total oil imports for the month.
- Prior to the war in Ukraine, Iraq and Saudi Arabia were the top two suppliers of crude oil to India.
- But as the West started weaning itself off Russian energy supplies following Moscow’s February 2022 invasion of Ukraine, Russia started offering discounts on its crude and Indian refiners started snapping up the discounted barrels.
- As the world’s third-largest consumer of crude oil with a high import dependency level of over 85 per cent, India is extremely sensitive to oil prices.
Prelims Takeaway
- Crude oil