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India’s imports of Russian crude oil hit a record high of 1.2 million barrels per day (bpd) in December, as deep discounts on Russian crude when the price cap entered into force made India the top destination for Russia’s oil, ahead of China, Bloomberg reported on Monday, citing data from energy analytics firm Vortexa.
India’s crude oil imports from Russia were 33 times higher in December 2022 than in December 2021, as India has emerged as a top buyer of Russian crude after the Russian invasion of Ukraine.
Before the invasion of Ukraine, India was a small marginal buyer of Russian crude oil. After Western buyers started shunning crude from Russia, India became a top destination for Russian oil exports alongside China.
Russia is now the single-biggest oil supplier to India, having overtaken Iraq in November.
India’s imports of Iraqi and Saudi oil increased in December, but they were still lagging the imports of crude from Russia. Imports of Iraqi oil rose by 7% to 886,000 bpd, while imports of Saudi crude jumped by 12% to 748,000 bpd, per Vortexa data.
Russia overtook Iraq to become the single-largest oil supplier to India in November, as Indian refiners raced to stock up on Russian oil ahead of the December 5 price cap and associated bans on transportation services for Russia’s crude.
Even after the price cap came into force, India continued to buy large volumes of discounted Russian crude and started importing some of Russia’s Arctic crude oil varieties for the first time, taking advantage of cheap Russian cargoes to meet robust demand.
While China and India have not joined the Price Cap Coalition, the fact that a price cap now exists gives the world’s top crude oil importer, China, as well as other buyers of Russian crude such as India, more bargaining power to negotiate steep discounts for the Russian crude even outside the price cap mechanism, analysts say.
By Charles Kennedy for Oilprice.com
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Charles is a writer for Oilprice.com