By T. Jayani, JadeTimes News
India’s imports of Russian oil surged to a 10 month high in May due to reduced Russian refinery capacity from Ukrainian drone strikes, making more of Moscow’s oil available for export, according to oil tanker tracking data and industry experts. This increase in India's intake of discounted Russian oil has significantly affected imports from Saudi Arabia.
In May, Indian refiners imported 1.96 million barrels per day (bpd) of Russian crude oil, the highest volume since July of the previous year and nearly 3% more than April’s imports, according to provisional ship tracking data from commodity market analytics firm Kpler.
India's Oil Imports in May
Russia: 1959 thousand bpd
Iraq: 961 thousand bpd
Saudi Arabia: 546 thousand bpd
UAE: 355 thousand bpd
US: 210 thousand bpd
Others: 759 thousand bpd
Total: 4791 thousand bpd
Imports from Saudi Arabia, India’s third largest source of crude, dropped nearly 13% sequentially to 0.55 million bpd, the lowest since September of last year. The decline is attributed to the ample availability of discounted Russian crude, which maintains a price advantage over Saudi oil. Viktor Katona, head of crude analysis at Kpler, explained that reduced Russian refinery runs due to Ukrainian drone strikes have resulted in more crude being available for export. He added that the decision by Indian refiners to minimize imports from Saudi Arabia is purely commercial, reflecting a $5-6 per barrel price difference between Saudi and Russian crude.
The supply of Russia's medium sour Urals crude to Indian refiners reached a record high in May at 1.53 million bpd, making up over 78% of India's Russian oil imports. The price differential between Urals and competing crude grades from India’s traditional West Asian suppliers was significant enough for Indian refiners to prefer the Russian grade.
May also saw a 10 month high in India’s oil imports from the United States, with Indian refiners importing 0.21 million bpd, a 4.5% increase from April. This increase is due to American crude becoming relatively cheaper compared to comparable grades from West Asia. Katona highlighted that India's US oil imports, primarily light sweet grades, are often blended with heavier barrels from Russia, Iraq, and Saudi Arabia, creating a commercial advantage due to current pricing trends.
Russia accounted for nearly 41% of the total 4.79 million bpd of crude oil imported into India in May, marking the second consecutive month that Moscow held a 40% or more share of New Delhi's oil imports. Russia's share had dropped to around 33% in the four months preceding April, down from a peak of nearly 46% in May 2023.
Iraq, India’s second largest source of crude, accounted for a fifth of New Delhi’s oil imports in May, while Saudi Arabia’s share was 11.4%. Before the Ukraine conflict, Iraq and Saudi Arabia were the top two suppliers of crude oil to India. However, as the West started reducing reliance on Russian energy following Moscow’s February 2022 invasion of Ukraine, Russia began offering discounts on its crude, which Indian refiners eagerly purchased.
As the world’s third largest consumer of crude oil with an import dependency level of over 85%, India is highly sensitive to oil prices. Although discounts on Russian crude have decreased over recent months, Indian refiners continue to prefer Russian oil due to significant savings from high import volumes, even with lower discount levels.
