Russia is now India’s second largest supplier of oil
New Delhi:
Russia became India’s second largest oil supplier in May, pushing Saudi Arabia to third place, but still behind Iraq which remains number one, data from trade sources showed.
Indian refiners received about 819,000 barrels per day (bpd) of Russian oil in May, the highest in any month, compared to around 277,00 in April, the data showed.
Western sanctions against Russia for its invasion of Ukraine prompted many oil importers to trade with Moscow, leading to a discount in the spot prices of Russian crude against other grades.
This gave Indian refiners, who rarely bought Russian oil because of the high freight cost, to switch to lower-priced crude.
The data showed that Russian grades accounted for about 16.5 per cent of India’s total oil imports in May, and helped raise the share of oil from CIS countries to around 20.5 per cent, while those from the Middle East declined to around 59.5 per cent. Gone.
The data showed that the share of African oil in India’s crude oil imports rose to 11.5 per cent from 5.9 per cent in April last month.
“Diesel is calling the tune… you need Nigerian and Angolan grades if you want to boost production of diesel and jet fuel. China has cut imports of Angolan grades due to the COVID-related shutdown, So some of these barrels are going to Europe and some to India,” said Ehsan-ul-Haq, analyst at Refinitiv.
Besides the availability of cheaper Russian barrels, higher official selling prices of Middle Eastern oil also prompted Indian refiners to buy Nigerian crude, he said.
India’s oil imports totaled 4.98 million bpd in May, the highest since December 2020, as state refiners ramped up production to meet rising local demand, while private refiners focused on profiting from exports done, as the data shows.
India’s oil imports in May were up by about 5.6 per cent over the previous month and about 19 per cent higher than a year ago, data sourced from sources showed.
India defended purchases of “cheap” Russian oil, saying imports from Moscow are only a fraction of the country’s overall needs and that the abrupt shutdown would increase costs for its consumers.
Higher oil imports from Russia reduced OPEC’s share of India’s total imports to 65 per cent in April.