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India’s imports of crude oil from Russia fell 6.5% in June after reaching a record high in May, while those from Iraq, Saudi Arabia and the US increased, according to energy cargo tracker Vortexa.
India imported 1.8 million barrels per day (mbd) of Russian crude in June. China imported 1.6 mbd of seaborne Russian crude in June, 12% more than in May, and Europe took 0.42 mbd, 28% more than in the previous month.
The share of Russian oil in India’s overall imports declined to 39.5% in June from 43% in May. Russia’s share still nearly equalled the combined share of Iraq (18.6%), Saudi (16.1%), and the US (5%), the next three largest suppliers to India.
“India’s imports of Russian crude have receded in June off the back of lower exports from Russia. There remains much uncertainty as to whether Russia will stick to its production cuts or ramp up its production in the coming months, given the importance of oil revenues for the country,” said Serena Huang, an analyst at Vortexa. “It is still too early to conclude whether India’s imports of Russian crude have peaked, but the appetite from Indian refiners remains very strong, given the attractive economics.”
India’s overall crude imports increased 2% month-on-month in June to 4.5 mbd. The country’s imports of Russian oil had increased every month since August 2022, when it was 731,000 barrels per day. India imported negligible volume from Russia traditionally but a deep discount available on Russian oil since the beginning of the Ukraine war has made it attractive for Indian refiners.
In June, India’s state-run refiners imported about twice the volume private refiners took from Russia. Imports of all key grades of Russian oil, including Urals, Sokol, ESPO blend and Varandey, marginally fell in June.
India’s imports of refined products from Russia remained nearly static at 140,000 barrels per day in June. Chinese imports of Russian products, however, increased by nearly a quarter to 358,000 barrels per day in June and Europe’s went up about a fifth to 590,000 barrels per day. The G7 countries imposed a price cap on Russian oil exports in December but that hasn’t much affected the trade.
Indian refiners, however, have had to pay in currencies other than the dollar for Russian oil priced above the cap.
Last month, a group of mercenaries appeared to challenge the authority of the Russian government for a short while. This triggered a brief worry in the oil market regarding Russian supplies, but oil prices quickly returned to normal.
“Russia’s short-lived mutiny highlights the political instability within the country, which could have far-reaching consequences in disrupting oil exports and possibly creating a supply shock to the market,” said Huang of Vortexa.
Source: Economic Times
