Sweeter grades of Russian crude oil, and not sour Urals, have been driving the growth of imports to India in recent months, showed data from energy tracker Vortexa.
Indian imports of sweeter crude oil from Russia, such as the ESPO blend, almost doubled in the month of April. India imported 175,000 barrels per day (bpd) of ESPO blend in April, compared to 91,000 bpd in March.
Similarly, import of Novy Port, a light sweet crude, also doubled in April from the previous month. In April, Russia supplied 62,000 bpd of Novy Port, compared to 31,000 bpd in the previous month.
ALSO READ: OPEC share in India's crude import basket shrinks to record low as Russian supplies peak
Meanwhile, India imported 1.2 million bpd of Russian Urals in April, a slight increase from the 1.1 million bpd in the month ago. The sour grade, however, still makes up for the majority of the Russian crude oil supplied to India.
The oil industry has classified crude oil based on its sulphur content (sweet or sour) and density (light or heavy).
Russia supplied 1.68 million barrels per day (bpd) of crude to India in April, holding the position of top crude oil supplier to India since October 2022.
Processing limit of sour crude
Energy experts said every refinery has a limit on the amount of sour crude oil it can refine, impacting the import of sour Urals from Russia. Compared to sour grades of crude oil, sweet crude oil is easier to refine, and is therefore costlier.
“There is a certain proportion of heavy or sour crude that a refinery can process. Heavier crude oil needs more processing in order to produce the quality of products required. The more complex a refinery, the more is the proportion of heavy or sour crude it can process. Heavy crude mix limit is probably leading to the shift to sweeter crude oil imports from Russia,” said an analyst requesting anonymity.
The shift towards sweeter crude oil can also be attributed to Russia’s diversification strategy as the European Union (EU), which used to import sweeter grades from Moscow, has now imposed a ban on them.
Hetal Gandhi, Director-Research, CRISIL Market Intelligence & Analytics, said, “The recent shift seen by Indian refiners of opting for sweeter crude is a culmination of multiple factors, primarily driven by minimum purchase requirements (from other Middle and East Asian producers) for sour crude, in turn reducing the offtake for Urals (also medium and sour). The increase in the purchase of sweeter fuels (ESPO blend, Novo Port light and Serbia light) is a part of the diversification strategy adopted by Russia in the aftermath of the import ban imposed by the EU.”
The share of Russian crude in India’s import basket stood at over 36 percent in April, compared to 33.9 percent in the previous month.
