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Published: Apr 10, 2023
Updated: Apr 10, 2023

Diversified Import Strategy : India's Crude Oil Imports from Russia Double that of Iraq

India's crude oil imports from Russia reached an all-time high of 1.64 million barrels per day in March 2023. This marks a significant increase from the country's traditional top oil supplier, Iraq, whose purchases were half of that at 0.82 million barrels per day. Russian crude oil now accounts for over one-third of all oil imported into India, making it the largest single supplier of crude oil for six consecutive months. This surge in imports can be attributed to the increased availability of Russian oil at a discount, which refiners are eager to take advantage of.

Russia's Share of India's Oil Imports

Russia's share of India's oil imports has risen from less than 1% to 34% since the start of the Russia-Ukraine conflict in February 2022. The West has shunned Russian oil, leading to India benefiting from the discount. The growth of India's imports of Russian crude oil has slowed down in recent times, suggesting that India may have reached its limit for taking in more sour crude.

Saudi Arabia and Iraq Follow

After Russia, Saudi Arabia was the second-largest supplier of crude oil to India in March 2023, selling 986,288 barrels per day, followed by Iraq, which sold 821,952 barrels per day. The UAE overtook the United States to become the fourth-largest supplier at 313,002 barrels per day.

Plateauing of India's Imports of Russian Urals

Vortexa's head of Asia-Pacific analysis, Serena Huang, notes that "while India continues to increase its imports of Russian crude month-on-month in March, the growth has slowed." Huang suggests that India's imports of Russian Urals could have plateaued. She attributes the increase in imports to the purchase of sweeter grades like Novy Port Light. Huang states that Indian refiners have room to increase purchases of sweeter grades in the interest of diversifying its crude sources.

Diversified oil import strategy may make domestic populace happy

India's imports of Russian crude oil have increased significantly in recent months, surpassing those of its traditional top oil supplier, Iraq. This growth can be attributed to the availability of Russian crude oil at a discount. Saudi Arabia, Iraq, and the UAE are other significant oil suppliers to India. However, India's imports of Russian crude oil may have plateaued, and refiners may need to diversify their sources to ensure the continuity of crude oil imports