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According to energy cargo tracker Vortexa, India’s crude oil imports from Russia reached 1 million barrels per day (bpd) in December 2022, its highest ever.
Russia contributed 1.19 million bpd in December, 0.2 percent of India’s crude oil imports in the year to March 31, 2022.
In November and October 2022, India purchased 909,403 and 935,556 bpd crude oil from Russia, respectively. Vortexa said that India imported 942,694 bpd from Russia in June 2022.
India imports 25% of its oil from Russia, which overtook Iraq and Saudi Arabia in October 2022.
EU price caps on Russian seaborne oil boosted imports. Industry insiders say Russian oil is cheaper than the USD 60 per barrel cap.
India imports and consumes third-most oil. It imports 85% of its crude oil. Refineries make fuels from crude oil.
Vortexa, an energy intelligence organisation, reported that India purchased 803,228 bpd of Iraqi and 718,357 Saudi oil in December. In December 2022, the UAE sold 323,811 bpd oil, surpassing the US as India’s fourth largest supplier. The US supplied 322,015 bpd, down from 405,525 in November 2022.
India’s thirst for Russian oil increased when the West shunned it to punish Moscow for its invasion of Ukraine.
S&P Global Commodity Insights reports that India is pursuing an oil import policy that will see substantial inflows from both the US and Russia in the near future while increasing efforts to diversify the crude basket to mitigate supply shocks.
“Although the Russia-Ukraine war has given an opportunity to the country’s refiners to bring in plentiful volumes of crude at discounted rates from the largest non-OPEC supplier, but that has not led to a fall in market share of the US, as India looks to bolster its energy ties with Washington,” it said.
Before the Russia-Ukraine crisis, more than 60% of the Indian crude basket was Middle Eastern, followed by North American, West African, and Latin American crudes, with Russian grades accounting for barely 2%.
West African crudes, which are primarily Brent-linked, have grown more expensive for Indian refiners since the war because European refineries are running low on Russian crudes.
US crude’s stake in the Indian crude basket rose from 5-6 percent in April to 10 percent in November, according to S&P Global statistics. The US overtook Kuwait as India’s fifth-largest oil supplier in the fourth quarter of 2022.
In December 2021, India purchased 36,255 barrels of crude oil from Russia, compared to 1.05 million from Iraq and 9,52,625 from Saudi Arabia, according to Vortexa.
After the Ukraine war began in late February, Russian imports resumed in March 2022.
India imported 68,600 bpd of Russian oil in March 2022, 266,617 the following month, and 942,694 in June 2022. In June 2022, Iraq was India’s leading oil supplier at 1.04 million bpd. Russia became India’s second-largest supplier that month.
Two months later, imports fell slightly. Vortexa reported 876,396 bpd in September 2022 and 935,556 in October.
The Indian government has vigorously defended its commerce with Russia, claiming it must buy oil from the cheapest source.
The government has said oil companies will acquire Russian oil outside the price cap.
S Jaishankar informed the Rajya Sabha on December 7 that Indian refiners will continue to seek the best bargains for the nation.
“We do not ask our companies to buy Russian oil. We ask our companies to buy oil (based on) what is the best option that they can get. Now, it depends on what the market throws up,” he had said while replying to clarifications sought by MPs on his suo moto statement on foreign policy.
According to what Jaishankar has said previously, the businesses will seek out sources that are more competitive.
“Please do understand it’s not just we buy oil from one country. We buy oil from multiple sources, but it is a sensible policy to go where we get the best deal in the interests of the Indian people, and that is exactly what we are trying to do,” he had said.
As part of the effort by the West to reduce Moscow’s ability to wage war in Ukraine while maintaining stable global prices and supplies, the executive body of the European Union has requested that its 27 member countries place a cap on the price of Russian oil at USD 60 per barrel. This is part of the EU’s attempt to squeeze Moscow’s oil revenues and limit its ability to do so.
It will be illegal for western shipping and insurance companies to handle Russian oil supplied at a price that is higher than the price cap beginning on December 5, 2022.
On the other hand, the price cap will not apply to vessels that were filled with Russian oil before December 5 and emptied at their destination before January 19 of the following year.
India may continue to purchase oil from Russia, according to a senior government official, provided that the country is able to provide ships, pay for insurance, and come up with a method of payment.