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HomeInfrastructureIndia's Crude Oil Imports Surge to Pre-Pandemic Levels, Led by Russian Supply

India’s Crude Oil Imports Surge to Pre-Pandemic Levels, Led by Russian Supply

India’s crude oil imports witnessed a significant uptick in March, reaching 5.2 million barrels per day, the highest level recorded since early 2020.

G7 price cap of $60 per barrel Russian

This surge, as analysed by intelligence firm Kpler, was fuelled by increased refinery operations across Indian refiners. Comparatively, March imports marked an 11% increase from February volumes and a 4.5% rise from the same period in 2023, when imports stood at 4.9 million barrels per day. Of notable mention is the escalation in India’s crude oil imports from Russia, which reached 1.8 million barrels per day in March, marking the highest volume since July of the previous year. This spike was primarily attributed to elevated discharge of Urals, a significant Russian crude grade. Despite a slight decline from the same period last year, Russia has emerged as India’s top crude oil supplier post the Ukraine conflict outbreak, offering competitive discounts to secure market share.

However, Russia’s share in India’s total imports witnessed a marginal dip in March, standing at 34.5%, down from the peak of 45% in May 2023. Notably, Urals discharges to India surged to around 1.5 million barrels per day, up from 1.1 million barrels per day in February, as Russian supplies filled the void left by Venezuelan crude amid sanctions. In parallel, imports from Iraq also saw a significant uptick, registering a 66% increase to 1.3 million barrels per day in March, marking the highest volume since 2020. This trend indicates a return to traditional West Asian oil suppliers by Indian refiners. Despite a decline in Saudi Arabia’s oil imports by 18% in March, imports from the United Arab Emirates (UAE) witnessed a notable surge, growing by 39% to 435,283 barrels per day, the highest level since June 2022.

Analysis suggests that India’s growing reliance on West Asian nations for oil supply can be attributed to various factors, including narrowing discounts on Russian crude, uncertainties surrounding sanctions, and increased freight costs amid geopolitical crises. Furthermore, despite the G7 price cap of $60 per barrel, Russian oil grades are being sold at higher prices, with discounts on Urals narrowing. These dynamics highlight the evolving landscape of India’s crude oil imports and its implications for the energy sector.

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