India’s Crude Oil Imports From Russia at Two-Year Low

The U.S. sanctions on Russia’s oil trade have led to a slump in Indian imports of Russian crude, which have plunged to a two-year low in February, per data from analytics firm Kpler cited by Bloomberg.

Since the Russian invasion of Ukraine and the bans on Russian oil in the West, India has become a key buyer of Russian crude, alongside China. Russia, for its part, became the single biggest oil supplier to India, the world’s third-largest oil importer.

Indian imports of Russian crude slumped to 1.4 million barrels per day (bpd) in February, down by 14.9% compared to January, according to the data.

For India, which imports more than 80% of the crude it consumes daily, the costs have spiked and the cheap Russian barrels are disappearing as Indian refiners steer clear of tankers explicitly sanctioned by the U.S. 

Russia is prioritizing trade to China and is reshuffling tankers to service the Far East Russia-China route after dozens of vessels previously on this route were sanctioned by the United States in January.

Indian refiners have been scrambling for alternatives after the U.S. sanctions designated hundreds of tankers, as well as oil traders, last month.

Now the sanctions have reduced the availability of non-sanctioned tankers to carry out the trades.

While imports from Russia dropped, India relied on more Iraqi crude, whose volumes rose by 8.3% in February compared to January. Iraq is India’s second-largest oil supplier after Russia.

India has received clarification from the U.S. that the Russian oil tankers sanctioned last month are allowed to discharge their crude at Indian ports until February 27.

Indian refiners are already scrambling for supply for arrival after February. 

India will continue to buy Russian oil if it is sold below the $60 per barrel price cap and delivered on non-sanctioned tankers and without any involvement of sanctioned companies or individuals, Indian officials have said.

By Tsvetana Paraskova for Oilprice.com

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