India's Russian oil imports jump 33 times in December compared to year-ago, tops 1 million bpd

“Russia has likely offered its crude at an attractive discount to Indian refiners, which have surpassed China as the largest importer of Russian crude,” Bloomberg quoted Serena Huang, lead Asia analyst at Vortexa, as saying. Besides Urals, India has stepped up imports of other Russian grades like Arco, Sakhalin and Varandey in recent months, she said.

India meets more than 85 percent of its oil demand via imports, which makes it highly vulnerable to price volatility. The state-owned refiners, who have been prevented by the government from raising pump prices of diesel and gasoline since May, have increasingly favored cheaper Russian imports.

Imports from India’s two other main suppliers also increased last month. Purchases from Iraq climbed 7 percent to around 886,000 barrels a day, while those from Saudi Arabia increased 12 percent to about 748,000 barrels a day, according to Vortexa.

The United Arab Emirates overtook the US to become India's fourth largest supplier, selling 323,811 bpd oil in December 2022. The United States supplied 322,015 bpd, down from 405,525 bpd in November 2022.

According to S&P Global Commodity Insights, India is aiming to pursue an oil import policy that will witness robust inflows from both the US and Russia in the foreseeable future, while stepping up efforts to diversify the crude basket even further to cushion the impact of any supply shock going ahead.

"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.

Prior to the Russia-Ukraine conflict, more than 60 per cent of the Indian crude basket was made up of Middle Eastern crudes, with the remainder made up of North American crudes at around 14 per cent, West African crudes at around 12 per cent, and Latin American crudes at around 5 per cent, with Russian grades accounting for only about 2 per cent.

Since the war began, West African crudes have become more expensive for Indian refiners because they are mostly Brent-linked and are being pulled in by European refineries that are running low on Russian crudes.

According to S&P Global data, the share of US crude in the Indian crude basket increased from 5-6 per cent in April to around 10 per cent in November last year. In the last quarter of 2022, the US displaced Kuwait to become the fifth-largest oil supplier to India.

As per Vortexa, India imported just 36,255 barrels per day of crude oil from Russia in December 2021, compared to 1.05 million bpd from Iraq and 9,52,625 bpd from Saudi Arabia.

There were no imports from Russia in the following two months, but they resumed in March 2022, soon after the Ukraine war broke out in late February.

India imported 68,600 bpd of Russian oil in March 2022, which increased to 266,617 bpd in the following month and reached the previous peak of 942,694 bpd in June 2022. But in June 2022, Iraq was India's top supplier with 1.04 million bpd of oil. Russia, in that month, became India's second-biggest supplier.

Imports dipped marginally in the following two months. They stood at 876,396 bpd in September 2022 before rising to 935,556 bpd in October, according to Vortexa.

With Reuters & Bloomberg inputs