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India ramps up crude oil supply from Russia in the last two months; Iraq, Saudi lag behind
In CY24, India has sourced the maximum crude oil from Russia in the last two months, while supplies from its traditional suppliers Iraq and Saudi Arabia have depleted to the lowest level in the same period, according to energy cargo tracker Vortexa.
In June, at 1.93 million barrels per day (bpd), Indian imports of crude oil from Russia were the highest, while in July it was 1.81 million bpd. The rise in Russian oil supply to India comes despite narrowing discounts from the country.
Russia has become the biggest supplier of crude to India since war broke out between Ukraine and Moscow in 2022. The country has been providing crude at discounted rates to India after the West imposed sanctions on it. However, in recent months, the discounts have reduced as more countries are accepting Russian oil.
Meanwhile, imports from Saudi Arabia and Iraq slumped to their lowest this year in June and July 2024. In June, Saudi Arabia supplied 4,54,000 bpd of crude to India, while in July it supplied 6,06,000 bpd. From Iraq, India imported 8,01,000 bpd in June and 6,03,000 bpd in July.
“Even if we get only a few dollars worth of discount on Russian crude, it is still attractive to Indian refiners. Right now, GRMs (gross refining margins) have come down globally, so it makes economic sense for refiners to keep buying Russian crude even when discounts have gone down,” said Prashant Vasisht, VP and Co-Head, Corporate Ratings, ICRA.
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