Russia became the fourth-largest oil supplier to India in April, with volumes set to rise further in coming months as low prices spur demand from the world’s No. 3 oil consumer and importer, tanker tracking data showed.
Russia’s share in India’s oil purchases rose to a record 6 per cent, about 277,000 barrels per day (bpd) in April, up from about 66,000 bpd in March, when it was in 10th position, according to the data, which was supplied by trade sources.
Indian Oil Corp. (IOC.NS), the country’s top refiner, bought its first-ever Russian Arco oil cargo last month.
Western sanctions against Russia for its invasion of Ukraine has opened a rare arbitrage flow, prompting Indian refiners to increase buying of cheaper Russian oil shunned by many Western countries and companies.
“Prices of Russian Urals crude fell sharply due to sanctions against Russia while Kazakhstan’s CPC blend crude came under pressure as it is loaded from a Russian port,” said Ehsan Ul Haq, analyst with Refinitiv.
Indians had bought stranded Russian oil while some European buyers had bought higher volumes of African and US oil, he said.
The share of African oil in India’s overall oil imports declined to about 6 per cent in April from 14.5 per cent in March, while that of US almost halved to 3 per cent.
Grades from Azerbaijan, Russia and Kazakhstan together accounted for about 11 per cent of India’s imported oil in April, compared with about 3 per cent in March. The share of Middle Eastern oil rose to 71 per cent from 68 per cent.
India’s oil imports from Russia are set to rise further to about 487,500 in May, since refiners have ramped up purchases from Russia, preliminary data from Refinitiv flows show.
Last month, Iraq continued to the top oil supplier to India, followed by Saudi Arabia and the United Arab Emirates.
In April, Indian refiners shipped in 4.7 million bpd of oil, up 6.9 per cent from the previous month and about 11.6 per cent higher than a year earlier, when a second COVID-19 wave hit local oil demand.
India’s oil imports in April were high as refiners raised runs to meet local demand and gain from robust refining margins, Haq said.
“Also the companies got Russian grades at very tempting rates and they had to lift committed volumes under term contract with Middle Eastern producers,” Haq said.
The higher imports from Russia dragged down OPEC’s share of foreign supplies to India in April.