India’s import of Russian crude oil in December fell to the lowest in the year on account of rising domestic demand from Moscow as its refineries resumed operations after the maintenance season. Despite the steep fall in imports from Russia, the country remained the top crude oil supplier to India, data from commodity market analytics firm Kpler showed.
India imported 1.44 million barrels per day (bpd) of crude oil from Russia in December, declining from 1.78 million bpd in the previous month. “Indian refiners continue to prioritize Russian crude, as even marginal discounts yield significant savings in light of India’s over 85% crude import dependency. As the world’s third-largest crude consumer, India remains heavily inclined toward cost-efficient options, making Russian crude integral to its procurement strategy despite shrinking discounts,” said Sumit Ritolia, senior oil refining analyst at Kpler.
Discounts offered by Moscow to Indian refiners on purchase of crude oil has declined sharply in 2024 on account of bigger market for Russian oil. To supplement the drop in Russian volumes in December, refiners increasingly turned to traditional Middle-Eastern suppliers. In December, Iraq supplied 1.23 million bpd of crude oil to India, higher than 890,000 bpd in the previous month, while Saudi Arabia supplied 582,000 bpd of crude, compared to 621,000 bpd in November.
India’s total crude oil imports also increased in December driven by resumption in refinery activity. India imported 4.8 million bpd of crude oil in December, compared to 4.7 bpd in the previous month, showed data.
“India's crude oil imports experienced a notable rebound in November and December 2024, driven by the resumption of full-capacity operations at domestic refineries following the seasonal maintenance shutdowns. This recovery in refinery utilization, alongside robust domestic demand for fuels and petroleum products, significantly boosted crude oil imports. The uptick highlights India’s strong post-maintenance operational momentum in late 2024, setting a solid foundation for Q1 2025,” said Ritolia.
2025 Outlook
Kpler expects India’s crude oil imports to remain strong, supported by ramped-up refinery operations. Higher oil demand is likely to extend into the first quarter of 2025, driven by seasonal demand and state refiners maximizing throughput to meet fiscal-year targets and rising domestic consumption, it added.
“Looking ahead to 2025, new refining capacities such as the Barmer Greenfield Refinery, along with capacity expansions at Barauni (60 kbd), Panipat (116 kbd), and Visakhapatnam RHCU, are expected to further elevate crude import volumes. However, periodic refinery maintenance activities may result in short-term fluctuations in import levels, emphasizing the cyclical nature of India’s crude demand,” said Kpler.
To meet rising domestic demand, Indian oil companies primarily Indian Oil Corporation Limited (IOCL), Bharat Petroleum Corporation Limited (BPCL) and Hindustan Petroleum Corporation Limited (HPCL), have plans to increase their respective refining capacity.
A recent report by the International Energy Agency (IEA) said India is set to lead global oil demand growth until 2035, adding nearly 2 million bpd to global oil demand in the period.
India’s rising energy demand has resulted in higher crude imports with the country’s dependence on oil imports climbing to around 87 percent in the recent months.
Discover the latest Business News, Sensex, and Nifty updates. Obtain Personal Finance insights, tax queries, and expert opinions on Moneycontrol or download the Moneycontrol App to stay updated!
