India’s imports of crude oil from Russia spiked in January despite the US slapping fresh sanctions on that country's oil producers and tanker fleet.
In January, India imported 1.67 million barrels per day (bpd) of crude oil from the Eurasian nation—rising 13 percent from December 2024—showed data from commodity market analytics firm Kpler. Russia supplied 1.48 million bpd of crude oil to India in December.
Russia is currently India’s largest crude supplier, making up for over 30 percent of the country’s total oil imports, a significant rise from 0.2 percent prior to the war between Ukraine and Moscow in 2022.
With the US on January 10 imposing new sanctions on Russian oil producers Gazprom Neft and Surgutneftegaz, as well as on about 180 tankers shipping Russian oil, crude exports from the country are expected to plunge in the near term. The sanctions, imposed by the outgoing Biden administration, were an attempt to curb Moscow’s revenues used to finance the war in Ukraine and disrupt Russia's shadow oil tanker fleet.
The impact of the US sanctions, however, would be more pronounced in the coming months. India’s oil secretary Pankaj Jain had earlier said that according to a communication received by the US Office of Foreign Assets Control, the tankers carrying Russian oil have to be discharged by February 27 and financial transactions need to be completed by March 12 under the latest US sanctions.
India’s oil imports from Russia are expected to decline as refiners have been unable to secure spot purchases from there. The country’s largest oil company Indian Oil Corporation Limited (IOCL) said it sees the share of Russian crude oil in its total import basket declining in the near term as the refiner has not finalised any new spot contracts from the country following the January 10 sanctions.
The country's state-run oil marketing companies (OMCs) including IOCL, Bharat Petroleum Corporation Limited (BPCL) and Hindustan Petroleum Corporation Limited (HPCL) purchase Russian oil from the spot market. They have been unable to secure a term deal with Russians suppliers until now.
“Potential disruptions in tanker availability could lead to logistical constraints and higher freight costs. Discounted Russian crude remains attractive, but financial transactions and insurance challenges may compel refiners to diversify sourcing. Increased purchases from Middle Eastern suppliers—particularly Iraq and Saudi Arabia—are likely if Russian crude volumes decline,” said Sumit Ritolia, senior oil refining analyst, Kpler.
Diversification strategy
Imports from other crude oil suppliers including Saudi Arabia, the US, Kuwait and Brazil also saw an uptick in India’s total imports in January, indicating the country’s strategy of diversifying sources in case of supply challenges from Russia in the coming months.
Saudi Arabia supplied almost 12 percent more crude oil to India in January from the previous month. The de facto OPEC leader supplied 723,000 bpd in the month.
Meanwhile, India’s crude oil imports from the US saw a steep increase of 322 percent to 279,000 bpd in January from 66,000 bpd a month earlier. Oil imports from Iraq, however, saw an 8 percent decline in January from December 2024.
India’s total oil imports in January rose by 6 percent to 4.98 million bpd, against 4.70 million bpd in December.
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