India’s crude oil import landscape witnessed a notable shift in April, marked by a significant surge in imports from Russia, despite geopolitical tensions and international sanctions.
According to data analysed by intelligence firm Vortexa, crude oil imports from Russia reached a 9-month high, defying expectations amidst US sanctions targeting Russian vessels and shipping companies. The analysis revealed that Russia exported approximately 1.78 million barrels of crude oil per day to India in April, representing a robust increase of 13.4% from the previous month. This surge marked the highest level of Russian imports since July 2023, underscoring the resilience of India’s crude oil sourcing strategy amidst evolving geopolitical dynamics. While India’s overall crude oil imports experienced a marginal decline in April, with cumulative imports falling to 4.54 million barrels per day from 4.91 million bpd in March, the surge in Russian shipments offset declines from traditional suppliers in the Middle East. Import volumes from Iraq, a key supplier, witnessed a notable decline of 35% in April, while imports from Saudi Arabia recorded a modest increase of 3.7%.
Analysts attribute India’s sustained preference for Russian crude to several factors, including competitive pricing and consistent supply amidst tightening discounts and stringent Western sanctions. Despite concerns over narrowing discounts offered by Russia, Indian refiners continue to find Russian grades more cost-effective compared to Middle Eastern alternatives, contributing to the sustained influx of Russian crude into the Indian market. However, analysts caution that the narrowing discounts on Russian oil could potentially inflate India’s net crude oil import bill in the fiscal year 2024-25. Estimates suggest that if prevailing discount levels persist, India’s crude import bill could rise to $101-104 billion in FY25, representing a significant uptick from the previous fiscal year.
Looking ahead, analysts anticipate that India’s imports of Russian crude will remain robust, driven by competitive pricing relative to Middle Eastern grades and ongoing geopolitical uncertainties. As global crude oil prices continue to fluctuate amidst geopolitical tensions and supply constraints, India’s strategic reliance on Russian crude underscores the complexities of navigating the global energy landscape. India’s sustained import of Russian crude oil reflects the country’s pragmatic approach to securing energy resources amidst geopolitical uncertainties, highlighting the resilience and adaptability of India’s energy sector in the face of evolving global dynamics.
