In June, India’s imports of Russian oil reached a 13-month high, driven by record volumes of Russia’s key crude grade, Urals. This surge is attributed to increased availability of Russian crude due to Ukrainian drone strikes on Russian refinery infrastructure and significant price differentials compared to competing Middle Eastern crude grades. Consequently, India’s Russian oil imports have significantly impacted flows from Saudi Arabia, which saw its lowest monthly import volumes in over a decade.
According to provisional data from oil tanker tracking and industry experts, Indian refiners imported 2.13 million barrels per day (bpd) of Russian crude oil in June, the highest since May of the previous year. This figure represents a 7.2% sequential increase and accounts for 45% of India’s total oil imports for the month. In contrast, oil imports from Saudi Arabia, India’s third-largest source market for crude, declined by over 25% sequentially to 0.41 million bpd, the lowest level in more than ten years. This decline is primarily due to the ample availability of discounted Russian crude, which continues to hold a price advantage over Saudi oil.
Industry analysts highlight that Saudi Arabia has been the largest sufferer of increased Russian oil inflows, with June imports from Saudi Arabia being the lowest monthly figure since January 2014. The Urals crude, Russia’s flagship grade, remains the mainstay of India’s Russian oil imports. In June, Indian refiners purchased a record 1.61 million bpd of Urals crude, constituting three-fourths of India’s total oil imports from Moscow. The significant price differential between Urals and competing crude grades from India’s traditional West Asian suppliers has led to a marked preference for the Russian grade.
While Iraqi oil imports in June were not as severely affected as those from Saudi Arabia, they still saw a notable decline. Indian refiners imported 800,000 bpd from Iraq, the lowest since February 2024. The reduced interest in Iraq’s medium sour grade, Basrah Medium, contrasts with the relatively stable demand for Basrah Heavy. This trend indicates that whatever competes with Urals is currently losing favour among Indian refiners.
June also marked a 17-month high for India’s oil imports from the United States, making the US India’s fourth-largest source of crude oil for the month, surpassing its usual fifth position. Indian refiners imported 0.37 million bpd of crude from the US in June, primarily due to the relative affordability of light American crude, particularly shale oil, compared to similar grades from West Asia. These light sweet grades are typically blended with heavier barrels from Russia, Iraq, and Saudi Arabia to balance the density of the oil mix.
Before the Ukraine conflict, Iraq and Saudi Arabia were India’s top two crude oil suppliers. However, following the Western sanctions on Russian energy supplies post the February 2022 invasion of Ukraine, Russia began offering discounts on its crude, which Indian refiners eagerly snapped up. Despite the recent reduction in discount levels, Indian refiners continue to favour Russian oil due to the substantial savings derived from high import volumes.As the world’s third-largest consumer of crude oil with an import dependency exceeding 85%, India remains highly sensitive to oil prices. The continued preference for Russian oil, despite the narrowing discounts, underscores the strategic and economic considerations guiding India’s crude import decisions.
