Russia Becomes India’s Top Oil Supplier

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, Reuters reported on Wednesday, citing data obtained from trade sources.  

Overall, Indian imports in November averaged around 4 million barrels per day (bpd), down from October, due to maintenance at some refiners. Russia supplied a massive 23% of all the crude imports to India last month, or 908,000 bpd, according to the data Reuters has obtained. 

Indian imports of Russian crude rose by 4% from October for a fifth consecutive month of rising purchases from Russia.

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.

On the other hand, Indian imports of Iraqi crude slumped in November to the lowest level since September 2020, and shipments from Saudi Arabia dropped to a 14-month low, the data showed.   

Russia’s crude oil loadings were essentially little changed in November compared to October, at just over 5 million bpd, as record shipments to India offset lower exports to the European Union, the International Energy Agency (IEA) said on Wednesday in its Oil Market Report for December. Loadings to the EU dropped by 430,000 bpd to 1.1 million bpd, but exports to India hit a record of 1.3 million bpd, according to IEA.

Last month, at least four Indian refiners were looking to buy Russian crude cargoes that can load ahead of December 5—the day on which the EU embargo and the price cap on Russian oil took effect—and discharge before January 19, Bloomberg reported at the end of November, quoting sources with knowledge of the plans.

While the West was still considering the parameters of the price cap, the U.S. Treasury issued at the end of October guidance that says Russian crude oil loaded onto a vessel at the port of loading for maritime transport prior to December 5 will not be subject to the price cap if the oil is unloaded at the port of destination before January 19, 2023.  

By Tsvetana Paraskova for Oilprice.com

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