After a sharp increase in May and June, India is gradually moving away from the spot purchase of Russian-origin crude oil. In the last 3 months to September, India’s import of Russian crude oil has declined significantly due to high freight rates between Russia and India. Since July, India has moved back to Africa and the Middle East including its trusted partner Saudi Arabia.
Since May, Russian crude oil contributed to nearly 20% of India’s overall imports which displaced New Delhi’s conventional suppliers from the Middle East, West Africa, and the United States.
Russia was India’s 3rd largest crude oil supplier in August, meeting 18.2% of the country’s entire oil demand. Saudi Arabia stood as India’s largest oil supplier at 20.8% and Iraq at 20.6%.
“Whether Russia has withdrawn the discount offer on crude oil to India or not is yet to be announced by the government authorities on either side. We understand that the discount offer must have been withdrawn as prices have already fallen to US$ 75 a barrel. Also, the government might be shifting attention to other sources also as it cannot depend on one source for the entire crude sourcing. Normally, during a time of tense geopolitical environment, depending upon one source – Russia, may not be advisable. Hence, India’s crude oil import could have declined,” said Gnanasekar Thiagarajan, Director, Commtrendz.