An Indian refining source noted, “India’s requirement for Russian oil is going to go up as long as there are no further tightening of sanctions,” highlighting the nation’s growing dependency on Russian energy supplies
NEW DELHI: In a significant shift in global oil trade dynamics, India has overtaken China as the world’s largest importer of Russian oil as of July. The shift comes as Chinese refiners reduced their purchases due to lower profit margins from fuel production, while India’s demand surged. Data from trade and industry sources reveal that Russian crude accounted for a record 44 percent of India’s overall oil imports last month, with imports reaching an unprecedented 2.07 million barrels per day (bpd).
This figure represents a 4.2 percent increase from June and a 12 percent rise compared to the same period last year. In contrast, China’s July oil imports from Russia stood at 1.76 million bpd, according to Chinese customs data. Indian refiners have increasingly turned to discounted Russian oil in the wake of Western sanctions against Moscow, which have curtailed energy purchases in response to Russia’s invasion of Ukraine. This shift has provided a substantial boost to India’s trade with Russia, particularly in oil and fertilizer imports, helping to stabilize global prices and curb inflation.
An Indian refining source noted, “India’s requirement for Russian oil is going to go up as long as there are no further tightening of sanctions,” highlighting the nation’s growing dependency on Russian energy supplies. India’s rising imports have also begun to alter the flow of Russian ESPO Blend crude, traditionally favored by Chinese buyers, towards South Asia. ESPO imports to India surged to 188,000 bpd in July, facilitated by the use of larger Suezmax vessels. Northeast China, typically the largest market for ESPO crude due to its proximity, has seen a decline in demand amid sluggish fuel consumption.
Despite this shift, Iraq remains India’s second-largest oil supplier, followed by Saudi Arabia and the United Arab Emirates. India’s crude imports from the Middle East rose by 4 percent in July, increasing the region’s share in India’s overall oil mix to 40 percent, up from 38 percent in June. This development underscores India’s evolving role in the global energy market and highlights the broader implications of geopolitical tensions on international trade flows.
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