Russia is now offering oil to increase market share amid competition India Cheaper than Saudi Arabia During April-June, Russian crude was cheaper than Saudi Arabia and was discounted by about $19 a barrel in May. According to a Bloomberg report, Russia overtook the state as the second largest supplier to India in June, just behind Iraq.
India is dependent on imports to meet 85 per cent of its oil requirements. After Russia’s invasion of Ukraine, Russian oil prices fell as most countries abandoned it. During this period, India and China have become interested consumers.
According to official data, India’s crude oil import bill rose to $47.5 billion in the second quarter as demand for the fuel buoyed by a jump in global prices. This compared to $25.1 billion in the same period last year, when prices and volumes were lower. Oil has recently cracked down on concerns of an economic slowdown, which has brought some relief to consumers.
“Indian refiners are going to try and try their hand at the cheapest crude that works with their refinery and product configuration… Russian crude fits that bill for now. As reported by Bloomberg, Vandana Hari, founder of Wanda Insights in Singapore, said Saudis and Iraqis are not completely losing out because they are directing more supplies to Europe.
While Russian oil discounts to Saudi crude eased in June, the barrel was still about $13 cheaper, averaging about $102.
The Russian central bank said on Tuesday that India increased Russian oil imports by 4.7 times or more than 400,000 barrels per day (bpd) in April-May, thanks to price discounts.
Indian refiners are buying relatively cheap Russian oil, which has been rejected by Western companies and countries after sanctions were imposed against Moscow for a “special military operation” in Ukraine.
The central bank also said that China increased Russian oil purchases by 55 percent in May as Russia overtook Saudi Arabia as China’s top oil seller.
India and China have bought $24 billion worth of oil, gas and coal from Russia in just three months after their invasion of Ukraine. Of this, India spent $5.1 billion on Russian oil, gas and coal, five times the value a year ago.
China spent $18.9 billion in the three months to the end of May, nearly double the amount a year earlier. $24 billion is an additional $13 billion in revenue for Russia from both countries compared to the same months in 2021.
Russia is offering big discounts on its energy exports, which prompted India to buy more from the country. According to data from Kpler, Russian oil arrivals in India stood at 740,000 barrels per day in May, up from 284,000 barrels in April and 34,000 barrels a year ago.
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