India Sets New Record for Crude Oil Imports from Russia as Buying Limit Nears
India’s crude oil imports from Russia reached a new high last month, as New Delhi approaches the limit of its buying spree from the major OPEC+ producer. Bloomberg reports that daily volumes climbed to 2.2 million barrels a day in June, marking a 10th consecutive month of increase, according to Viktor Katona, the head of crude analysis at Kpler.
The analytics firm’s data shows that Russian purchases once again surpassed the combined shipments of Saudi Arabia and Iraq. India has emerged as a significant consumer of Russian oil since the invasion of Ukraine. However, the country may soon reach its buying limit due to infrastructure challenges and the need to maintain good relations with other oil suppliers. Kpler suggests that imports may dip next month due to lower supply from Russia.
According to Kpler, state-run Indian Oil Corp. has been the largest purchaser of Russian crude in the past two months, followed by Reliance Industries Ltd. Overall, India’s imports of Urals, a type of Russian crude, reached another record of 1.5 million barrels a day in June.
In the aftermath of the war, Russia has been selling substantial quantities of crude oil to India to manage its energy exports. This growth has been a result of the European Union’s ban on oil imports from Moscow since December last year.
In May, Russian oil accounted for approximately 40% of India’s crude imports. This has led to a decline in imports from Iraq to a three-year low and from Saudi Arabia to their lowest level since September 2021.
Notably, there are significant price differences between crude oil imports from different countries. In April, the landed price of a tonne of oil from Russia was around $500, equivalent to $68.21 per barrel, using a conversion factor of 7.33. Meanwhile, oil from Iraq cost $570, and that from Saudi Arabia was $637.40. However, price details for May arrivals have not yet been updated.
As India’s dependence on Russian oil continues to grow, it will be essential to closely monitor the developments and ensure the country’s energy security. While Russian oil has proven crucial in the wake of geopolitical tensions, diversifying import sources and enhancing domestic infrastructure will be vital for India in the long run.
In conclusion, India’s crude oil imports from Russia have surged to a new high, surpassing the combined shipments of Saudi Arabia and Iraq. While this growth has been beneficial for India’s energy needs, the country must carefully manage its buying spree as it approaches its limit. Balancing relationships with other suppliers and investing in infrastructure will be crucial in maintaining a stable and secure energy supply in the future.
