India has been snatching Russian oil that was available at a discount after some in the West saw it as a means of punishing Moscow. file | Photo Credit: Reuters
India’s crude imports from Russia rose to a record 1.6 million barrels per day in February and now exceed imports from traditional suppliers Iraq and Saudi Arabia combined.
Russia remained the biggest supplier of crude, which is converted into petrol and diesel at refineries, for the fifth month in a row, according to energy cargo tracker Vortexa.
Refiners continue to snap up the plentiful Russian cargo available at a discount to other grades.
From a market share of less than 1% in India’s import basket before the start of the Russia-Ukraine conflict in February 2022, Russia’s share in India’s imports increased to 1.62 million barrels per day in February, accounting for 35%.
India, the world’s third-biggest crude importer after China and the United States, has been snatching Russian oil, available after a waiver by some in the West, as a means of punishing Moscow for its invasion of Ukraine. Was.
The increase in Russian imports has come at the expense of Saudi Arabia and the United States. Oil imports from Saudi fell 16% month-on-month and those from the US declined 38%.
According to Vortexa, Russia now accounts for more than the combined oil bought from Iraq and Saudi Arabia – India’s main oil suppliers for decades.
Iraq, which has been overtaken by Russia to become the biggest oil source for India, supplied 9,39,921 barrels per day (bpd) of oil in February while Saudi supplied 6,47,813 bpd.
The United Arab Emirates overtook the US as 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 at their lowest in 16 months.
“Indian refiners are enjoying enhanced refining margins from processing Russian crude,” said Serena Huang, head of Asia-Pacific analysis at Vortex.
“Refiners’ import appetite for Russian barrels is likely to remain strong as long as the economics are favorable, and financial and logistics services are available to support trade.” Russia is selling a record amount of crude oil to India to bridge the gap in its energy exports after the European Union banned imports in December.
In December, the EU embargoed Russian marine oil and imposed a $60-per-barrel price cap, which prevents other countries from using EU shipping and insurance services unless oil is sold below the cap. go.
Industry officials said Indian refiners are using UAE dirhams to pay for oil imported at prices below $60.
“About a quarter of Russian imports are now paid for in dirhams,” said an official.
From a market share of only 0.2% in India’s import basket before the start of the Russia-Ukraine conflict, Russia’s share in India’s imports increased to 35% in February 2023.