India keeps on taking major volumes of Russian oil, as the latest data suggests. Moscow supplies at present around 35% of India’s total oil imports, in stark contrast to less than 1% before the Ukraine war. Based on data provided by consultancy Vortexa, India imported around 1,62 million bpd in February from Russia. These record levels are almost the same as India’s imports from Iraq (940,000 bpd) and Saudi Arabia (648,000 bpd) combined. The UAE (Abu Dhabi) is India’s 4th largest supplier, with around 404,000 bpd. All these figures stand in contrast to the meager 248,000 bpd of crude coming from the U.S. Russian figures confirm, based on the tanker tracking analysis of Vortexa, that Moscow has been the leading oil exporter to India for the 5th month in a row. The main reason behind the surge of Russian crude oil exports to India is the fact that Moscow provides very hefty discounts to its crude.
International oil consultancy Kepler also sees a major boost to India as a Russian oil buyer in the long term. Viktor Katona of Kpler stated that Moscow will keep its oil prices to India subdued, even when the Ukraine War comes to an end. For Moscow the main advantage is clear, India is seen as not only a major upcoming hydrocarbon market but also fulfills a major geopolitical interest. As long as low crude oil prices are keeping India in the fold of Moscow, the West is not able to increase their global sanctions regimes against Putin’s regime. Moscow also wants to invest in a long-term relationship with India, which it sees as a potential partner in energy, technology and arms exports. Russia also is looking at the growing threats of Arab Gulf producers, such as Saudi Arabia, UAE and even Qatar, which will be more than happy to make a move on Russian market share in Asian energy markets. Moscow wants to have a foot in the door with India.
While China is Russia’s top importer of crude, Moscow has a keen interest in expanding its relationship with India. Delhi’s downstream sector has also become very important for Russia after G-7 nations imposed price caps and other sanctions in an attempt to lower its revenues from energy sales. Oil market analysts expect that the discounts on Russian crude will continue for some time to come. Kpler estimates that India is receiving a US$10 to $12 discount to the regular Brent futures price. At the same time, India is also buying Russian energy products, such as diesel. Kepler also indicated that India is more interesting than China from a geographical perspective, as the distance between the Russian port of Novorossiysk and Indian oil ports is smaller than the distance to Chinese oil hubs.