Russia overtook Saudi Arabia to become India’s second-largest supplier of crude oil last month, Reuters reported, citing unnamed trade sources.
The average daily rate of Russian oil exports to India stood at 819,000 barrels, according to the data that these sources shared, which compared with a meager 277,000 barrels daily in April.
According to a report by a Finnish environmental agency, Indian buyers now account for 18 percent of Russian crude oil exports. What is more interesting, however, is that some of the fuel Indian refiners produce using Russian crude is then exported, with some of it eventually ending up in the United States.
“We can see crude oil shipments going into refineries that take Russian oil, and then we can see where the stuff goes that they produce,” said Lauri Myllyvirta, lead analyst at the Helsinki-based Centre for Research on Energy and Clean Air, which authored the report.
Russian crude has been trading at a steep discount reaching $30 to Brent since the start of the war in Ukraine, which has made it especially attractive for large importers such as India and China.
Both countries have substantially increased their intake of Russian oil over the last three months, with Kpler reporting that so far this year, India has imported five times the amount of all the Russian crude it bought in the whole of 2021. Imports of Russian oil since the start of 2022 have totaled 60 million barrels versus 12 million barrels for the entirety of 2021.
Reportedly, the subcontinent is currently looking to secure six-month supply contracts with Rosneft right now, despite warnings from the United States to stop buying so much Russian oil. India relies on imports to satisfy more than 80 percent of its crude oil demand, which makes it particularly vulnerable to international price rallies and a natural fan of bargains such as Russian crude.
By Irina Slav for Oilprice.com
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