Indian refiners imported almost 40 percent of crude oil from Russia during May despite threat of Trump’s sanctions

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Indian oil refiners purchased the most amount of crude oil from Russia during the month of May - almost 40 percent of the total monthly import - despite US President Trump’s recent threat of sanctions on Moscow as peace talks with Ukraine stall.

Russia supplied 1.95 million barrels per day (bpd) of crude oil to India until May 28, higher than 1.93 million bpd supplied in April, showed global trade data analytics firm Kpler. India’s high offtake of Russian crude underscores New Delhi’s policy of importing the cheapest oil available in the market.

Aside of Russia, India has also ramped up oil supplies from Middle Eastern countries in May, including Iraq, Saudi Arabia and UAE. Oil imports from US, Nigeria, Angola and Kuwait, however, have slumped in May over previous month. India is one of the largest oil importers in the world with around 90 percent reliance of its total requirements on imports.

Despite the continued threat of sanctions on Russia, India continued buying oil from Moscow primarily due to the discounts on offer, especially on sour grade crude Urals. As Russia and Ukraine fail to agree on peace talks, Trump on May 26 called President Vladimir Putin “crazy” and threatened to impose sanctions on Moscow.

The Russian oil is already under multiple restrictions imposed by America. Former US President Joe Biden had in January sanctioned Russian oil producers Gazprom Neft and Surgutneftegaz, as well as around 180 tankers shipping oil from Moscow, while G7 nations imposed a $60-per barrel price cap on exported Russian oil.

“This (high Russian oil imports) reflects India's sustained reliance on Russian barrels due to significant price discounts and logistical adaptability. Urals grade remained the top preferred barrels with 75% of total imports, followed by CPC and ESPO (sweeter grades),” said Sumit Ritolia, lead research analyst at Kpler.

Ritolia said the average FOB prices for Urals in May stood around $50 per barrel, comfortably below the $60 per barrel price cap set by Western allies. On existing sanctions, he said their enforcement remains porous, enabling Indian refiners to maintain steady access to Russian crude.

Indian refiners include state-run oil marketing companies (OMCs) including Indian Oil Corporation (IOC), Bharat Petroleum Corporation (BPCL) and Hindustan Petroleum Corporation (HPCL). Private players include Reliance Industries (RIL) and Rosneft-backed Nayara Energy.

Strong Oil Imports

India’s total oil import remained strong in the month of May amid a decline in refinery maintenance-related shutdowns compared to April. Until May 28, India’s total oil imports stood at 4.97 million bpd, compared to the import of 4.85 million bpd of oil in April, showed Kpler data.

“In May, India witnessed a decline in refinery maintenance-related shutdowns compared to April, contributing to an increase in crude oil imports. Reliance’s Jamnagar refinery completed its planned maintenance by the end of April, enabling higher intake volumes in May. This trend is consistent with India’s typical refinery turnaround cycle, where most maintenance activities conclude by April or early May,” said Ritolia.

In May, India imported 1.09 million bpd from Iraq, 568 thousand bpd from Saudi Arabia, 495 thousand bpd from UAE and 228 thousand bpd from the US. This is in comparison to India's oil imports of 835 thousand bpd from Iraq, 539 thousand bpd from Saudi, 268 thousand from UAE and 337 thousand from the US in April.

Besides Russian volumes, India is seeing increasing lifts from the Middle East and even the US, indicating strategic diversification to balance geopolitical risk while fulfilling economic imperatives, said Ritolia.