Russia surpassed Saudi Arabia in becoming India’s second largest oil supplier in May, although it remains second only to Iraq, according to trade sources.
According to the data, Indian refiners received about 819,000 barrels per day (bpd) of Russian oil in May, the most in any month so far, up from roughly 277,00 in April.
Western sanctions against Russia for its invasion of Ukraine drove many oil importers to avoid doing business with Moscow, causing Russian crude to trade at a discount to other grades.
This gave Indian refiners, who had previously avoided buying Russian oil due to high freight costs, an opportunity to stock up on low-cost crude.
According to the data, Russian grades accounted for approximately 16.5 per cent of India’s total oil imports in May, helping to lift the share of oil from the C.I.S. countries to approximately 20.5 per cent, while that from the Middle East decreased to approximately 59.5 per cent.
According to the report, the share of African oil in India’s crude imports increased to 11.5 per cent last month from 5.9 per cent in April.
“Diesel is calling the tune … if you want to boost production of diesel and jet fuel then you need Nigerian and Angolan grades. China has cut imports of Angolan grades because of COVID-related shutdowns so some of these barrels are going to Europe and some to India,” said Ehsan Ul Haq, analyst with Refinitiv.
Apart from the availability of cheaper Russian barrels, he claims that higher official selling prices of Middle Eastern oil prompted Indian refiners to purchase Nigerian crude.
According to the report, India’s oil imports in May totaled 4.98 million bpd, the most since December 2020, as state refiners increased output to satisfy rising domestic demand and private refiners focused on exports.
According to statistics received from sources, India’s oil imports in May were around 5.6 per cent more than the previous month and approximately 19 percent higher than a year ago.
India has defended its purchase of “cheap” Russian oil, claiming that imports from Moscow only met a portion of the country’s overall needs and that a sudden suspension would raise prices for its consumers.
Higher Russian oil imports reduced OPEC’s share of India’s total imports to 65 per cent in April.
(Adapted from BusinessToday.in)