India’s Russian oil imports rose to an 11-month excessive in June, additional cementing Moscow’s continued dominance in New Delhi’s oil import basket. Based on tanker knowledge, Russian crude accounted for an enormous 43.2 per cent of India’s complete oil imports in June, outweighing the following three suppliers — West Asian majors Iraq, Saudi Arabia, and the United Arab Emirates — put collectively. This comes at a time when issues have surfaced in India over a controversial invoice within the US that proposes 500 per cent tariffs on nations that proceed to commerce with Russia. India and China are the highest importers of Russian crude, and New Delhi is partaking with American lawmakers to voice issues concerning its vitality safety and the invoice.
In a latest press convention in Washington, Overseas Minister S Jaishankar stated that India’s issues and pursuits on vitality have been “made conversant” to Republican Senator Lindsey Graham, who’s a key sponsor of the invoice. Jaishankar added that India will “should cross the bridge after we come to it, if we come to it”. In a latest interview with ABC Information, Graham had stated that US President Donald Trump inspired him to advance the invoice after the July break of the US Congress.
It’s but to be seen if the invoice, which Graham says would equip the US to power Russia to barter the top of the struggle in Ukraine, will flip into regulation in its present type. If that does occur, India could be pushed to chop down oil imports from Russia and improve imports from different suppliers, which may improve the price of imports. It may additionally result in problems in India’s ongoing commerce pact negotiations with the US, its largest buying and selling companion. At the moment, Indian refiners are adopting a wait-and-watch strategy on the matter, whereas maintaining Russian oil flows into India sturdy.
India will depend on imports to fulfill round 88 per cent of its crude oil wants, and Russia has been the mainstay of India’s oil imports for almost three years now. With a lot of the West shunning Russian crude following the nation’s February 2022 invasion of Ukraine, Russia started providing reductions on its oil to prepared patrons. Indian refiners had been fast to avail of the chance, resulting in Russia—earlier a peripheral provider of oil to India—rising as India’s greatest supply of crude, displacing the standard West Asian suppliers. Whereas the reductions have different over time, Russian oil flows to India have remained sturdy regardless of Western stress and restricted sanctions on Russia’s oil buying and selling ecosystem. Booming oil commerce with Russia has additionally catapulted the nation to the record of India’s greatest buying and selling companions.
On its half, India has maintained that it’s prepared to purchase oil from whoever gives the most effective worth, so long as the oil isn’t underneath sanctions. To make sure, Russian oil itself isn’t sanctioned, however the US and its allies have imposed a worth cap of $60 per barrel, as per which Western shippers and insurers can not take part in Russian oil commerce if the worth of Moscow’s crude is above that stage.
In June, India imported 2.08 million barrels per day (bpd) of Russian crude, the best since July 2024, and better by 12.2 per cent on a month-on-month foundation, based on vessel monitoring knowledge from world commodity market analytics agency Kpler.
“This resurgence in Russian volumes displays each industrial incentives and geopolitical realignments. Russian barrels have remained extremely aggressive as a consequence of reductions, cost mechanisms, and logistical flexibility by way of various delivery and insurance coverage networks. Regardless of mounting Western sanctions, Indian refiners have managed to keep up—and even broaden—procurement from Russia. Barring any extreme logistical or regulatory disruptions, this pattern is prone to persist within the coming months,” stated Sumit Ritolia, Lead Analysis Analyst, Refining & Modeling at Kpler.
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“Wanting forward, Russia will doubtless stay India’s largest crude provider (35-40%) supported by worth competitiveness and techno-economics. Nonetheless, this dominance may face stress if the West escalates enforcement of secondary sanctions focusing on monetary or delivery facilitators. Such a situation may both cut back Russian volumes or push Indian refiners to hunt higher compliance safeguards,” Ritolia added.
Imports from West Asia stay vital however present indicators of accelerating volatility. Oil imports from Iraq—India’s second-largest crude provider—had been round 893,000 bpd in June (down 17.2 per cent sequentially), adopted by Saudi Arabia with 581,000 bpd (flat sequentially), and the UAE at 490,000 bpd (up 6.5 per cent from Might). Regardless of having misplaced market share to Russia in recent times, proximity and reliability of West Asian suppliers—significantly Saudi Arabia, Iraq, and the UAE—imply that they are going to stay core contributors to India’s crude slate. In June, Iraq had an 18.5 per cent share in India’s oil imports, adopted by Saudi Arabia with 12.1 per cent, and the UAE with 10.2 per cent. The US retained its place as India’s third-largest provider of crude oil in June, with import volumes of round 303,000 bpd and a market share of 6.3 per cent.
Based on Kpler’s evaluation, oil imports from West Asia are anticipated to stabilise within the 35–40 per cent vary, and in the meantime India is anticipated to maintain its diversification efforts by tapping further volumes from Africa, Latin America, and the US to optimise refinery economics, steadiness geopolitical publicity, and improve vitality safety.
Geopolitical shifts, freight economics, and refinery economics are anticipated to proceed shaping India’s crude sourcing choices.
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Whereas fascinating for crude mixing and refinery optimisation, US crude stays comparatively high-cost for Indian refiners as a consequence of larger freight and longer voyages, and has up to now seen restricted scope for enlargement. Until freight prices change into extra beneficial or a diversification push is triggered by instability in different areas, business watchers say it’s unlikely that imports from the US and Latin America would develop considerably within the brief time period.