In a significant development, India, renowned as the world’s third-largest oil importer and consumer, has swiftly become the foremost purchaser of discounted Russian seaborne oil. This pivotal shift occurred in the wake of Western nations suspending their oil imports from Moscow due to its invasion of Ukraine. The latest industry data reveals that the share of Russian oil in India’s overall imports has surged to approximately 40% during the first half of fiscal year 2023/24.
A Quick Turn of Events
During the initial six months of fiscal 2023/24, India imported an average of 1.76 million barrels per day (bpd) of Russian oil, more than doubling the 780,000 bpd recorded in the previous year. Notably, September saw a notable recovery in India’s oil imports from Russia, with a substantial increase of 11.8% from August and a remarkable 71.7% surge compared to the same period last year, according to tanker data from industry sources.
Russian Dominance
Russia has solidified its position as India’s top oil supplier for the April to September period, with Iraq and Saudi Arabia following in second and third place, respectively. However, India’s imports from Iraq and Saudi Arabia have decreased by 12% and approximately 23%, down to 928,000 bpd and 607,500 bpd, during the same period. This decline in Middle Eastern supplies has caused the region’s share in India’s overall oil imports to plummet from 60% to 44%, compared to the previous year.
Commonwealth of Independent States (CIS)
Furthermore, India’s oil imports from the Commonwealth of Independent States (CIS), which includes countries like Azerbaijan, Kazakhstan, and Russia, nearly doubled, accounting for 43% of India’s oil imports. This growth can be attributed primarily to increased purchases from Moscow, as per the data.
OPEC’s Diminishing Role
The Organization of the Petroleum Exporting Countries (OPEC) has witnessed a significant drop in its share of India’s overall oil imports, now at its lowest point in 22 years. OPEC’s share, predominantly from the Middle East and Africa, has declined to 46% during April to September, compared to approximately 63% in the same period the previous year.
Implications
The shift in India’s oil imports towards Russia, coupled with tightened Middle Eastern supplies, showcases India’s flexibility in sourcing its oil. This situation may have far-reaching implications for the global oil market and geopolitical dynamics, as India reevaluates its energy sources and diversifies its imports.
Disclaimer: This article provides an overview of the current state of India’s oil imports and its shift towards Russian oil. It does not endorse or take a stance on the geopolitical issues surrounding these developments.
