According to S&P Global Commodity Insights, India’s appetite for Russian crude increased to levels unseen in recent years in October and surpassed volumes shipped by top Middle Eastern suppliers as refiners rushed to buy up ample cargoes before any potential shipping or policy hurdles once the EU’s sanctions kick in.
Russia’s market share in India’s imports increased from less than 1% before the start of the conflict between Russia and Ukraine to 4.24 million mt, or nearly 1 million b/d, in October, taking a 21% share comparable to that of Iraq and higher than Saudi Arabia’s share of the country’s imports, which was around 15% in that month.
“The crude that landed in October must have been acquired months in advance,” said Shreyans Baid, senior oil analyst for South Asia at S&P Global Commodity Insights. “The journey duration to India from Russian ports ranges between 2 and 5 weeks.”
However, he continued, “Future acquisitions of Russian crudes by Indian refiners will depend on how the EU ban shapes up the seaborne trade and if Russian crudes make financial sense given high freight charges and the market structure.”
According to Baid, “Indian crude imports have seen a jump in October and are likely to stay healthy in the coming months as the refineries start up from planned maintenance schedules.”
With a combined share of close to 55%, the Middle East as a region continues to be the major supplier of crude oil to India, notwithstanding the increase in Russian crude inflows.
India’s thirst for African crude has also been hurt by the increased proportion of Russian crude sales to that nation. This has resulted in a decrease in the share of West African crudes from 12.5% in January-September 2021 to 8.4% in the same period in 2022, as well as tighter market structure and higher volatility in freight markets.
