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Russia overtook OPEC heavyweights Iraq and Saudi Arabia to become the largest crude oil supplier to India in October, with record shipments of
946,000 barrels per day (bpd), the Economic Times reported on Wednesday, quoting estimates from energy analytics firm Vortexa.
Before the Russian 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.
Indian refiners haven’t expressed hesitation to deal with Russia—their primary incentive to buy has been the much cheaper Russian oil than international benchmarks and similar grades from the Middle East and Africa.
According to Vortexa’s estimates, India—the world’s third-largest crude oil importer—shipped in a record 946,000 bpd of crude from Russia last month, up by 8% compared to September. Total Indian imports increased by 5% month on month in October, Vortexa data cited by the Economic Times showed.
Of note was that Russia surpassed both Iraq and Saudi Arabia to become the number-one crude oil supplier to India. Russian crude accounted for 22% of all Indian imports last month, while Iraq’s share was at 20.5% and Saudi Arabia’s—at 16%.
Going forward, there will be a lot of uncertainties among buyers over Russia’s oil exports when the EU embargo enters into force on December 5.
Indian Oil Corporation and Bharat Petroleum Corporation Limited (BPCL), two of the biggest state-owned importers of Russian crude oil in India, have reportedly stopped looking for spot Russian crude oil supply set to arrive after December 5, as they await more clarity on the EU sanctions regime ahead of the deadline, including on the possibility of secondary sanctions on buyers of Russian crude.
India will also further diversify its oil imports to better prepare for future OPEC+ production cuts that raise oil prices and tighten supply, its Petroleum Minister Hardeep Singh Puri said last month.
By Tsvetana Paraskova for Oilprice.com
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Tsvetana is a writer for Oilprice.com with over a decade of experience writing for news outlets such as iNVEZZ and SeeNews.
Moreover, Russian exports of petroleum products to the EU which will be banned after February 2023 will be returning to the EU in the form of Indian-exported petroleum products refined from bought Russian crude.
This means that the forthcoming EU ban on Russian seaborne crude exports from 5 December this year and on petroleum products’ exports from February 2023 are doomed to fail miserably.
Dr Mamdouh G Salameh
International Oil Economist
Global Energy Expert