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Cheap Russian crude oil is attracting India’s price-sensitive buyers to the point that Russia became the fourth largest oil supplier to India in April, moving up from the 10th place in March, according to shipment-tracking data compiled by Reuters.
India, the world’s third-largest crude oil importer, significantly boosted its imports of Russian crude last month, when shipments averaged 277,000 barrels per day (bpd), per the tanker-tracking data compiled by Reuters from trade sources. This compares with India’s imports of some 66,000 bpd of Russian crude oil in March. Last month, Russian oil accounted for 6 percent of all Indian crude imports—a record-high share of Russian shipments.
Total Indian crude imports rose by 6.9 percent month on month to 4.7 million bpd in April, with Iraq holding onto its top supplier spot, followed by two other major exporters from the Gulf, Saudi Arabia and the United Arab Emirates (UAE).
Russia moved from 10th to fourth place in April and is set to account for an even larger share of Indian crude imports in May. India could import as much as 487,500 bpd of Russian oil in May, according to preliminary data from Refinitiv cited by Reuters.
Since the beginning of the Russian war in Ukraine, India—a price-sensitive crude buyer that has criticized OPEC and OPEC+ for keeping oil prices “artificially high”—has increased its purchases of Russian crude. Before the war, Indian refiners rarely bought oil from Russia at such a scale because of high freight costs.
Now Rosneft, the largest oil producer in Russia, will ship seven crude cargoes to India’s top refiner, Indian Oil Corporation, this month, traders with knowledge of the deals told Reuters at the beginning of this month.
India also is reportedly negotiating steep discounts for the Russian oil it is prepared to buy, asking for below $70 per barrel price to compensate for logistics, financing, and sanctions troubles for buying crude that is now toxic for most of the West.
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.