NEW DELHI: India’s oil imports from Russia surged to a record of around 950,000 barrels per day (bpd) in June, accounting for nearly a fifth of overall imports by the world’s third largest oil consumer, data provided by trade sources showed.
Indian refiners have been snapping up Russian oil sold at hefty discounts to Brent and Middle East staples after some Western companies and countries shunned purchases from Moscow following its invasion of Ukraine on February 24.
India shipped in about 4.8 million bpd of oil in June, down 3.8% from May but about 23% higher than a year earlier, the data showed. Last year, India’s oil imports were low as fuel demand was hit by a second deadly coronavirus wave.
Oil imports from Russia rose 15.5% in June from May, while those from Iraq and Saudi Arabia dropped by 10.5% and 13.5%, respectively, dragging the share of the Middle East to 56.5% from 59.3%, the data showed.
Russia continued to be the second largest oil supplier to India after Iraq, while Saudi Arabia remained in third spot for the second month in a row.
The higher oil intake from Russia raised its share of India’s overall imports to 19.8% from 16.4% in May, and that of Commonwealth of Independent States (CIS) countries to about 24% from 20.3% in May, the data showed.
Cheaper Russian oil is reducing losses for state-run Indian refiners selling fuel at lower prices on the domestic market, while adding to profits for private firms Reliance Industries Ltd and Nayara Energy, which export most of their refined products.
India, also the world’s third biggest oil importer, has defended its purchase of “cheap” Russian oil, saying it provided only a fraction of the country’s overall needs and a sudden stop would drive up costs for its consumers.
The United States and other Group of Seven rich nations last month agreed to explore imposing a ban on transporting Russian oil sold above a certain price in an effort to reduce Moscow’s revenues and deplete its war chest.
During April-June, the first quarter of India’s fiscal year, the country’s oil imports from Russia rose to 682,200 bpd from 22,500 bpd in the same period last year, the data showed.
Higher oil imports from Russia curbed OPEC’s share in India’s overall imports to 65.2% during the quarter and 60.8% in June. OPEC’s share of India’s oil imports has been declining since March, the data showed.