According to industry data cited by PTI, the share of oil imports from the Organisation of the Petroleum Exporting Countries (OPEC) in India hit an all-time low in April. India's import of cheaper Russian oil reached its peak, resulting in a decrease in OPEC's share of the country's oil imports.
In April 2022, OPEC nations, mostly in the Middle East and Africa, accounted for 72% of all the crude oil India imported. However, this percentage dropped to 46% in April 2023, as reported by the energy cargo tracker Vortexa.
Russia continued to be the single largest supplier of crude oil, which is converted into petrol and diesel at refineries, for a seventh straight month by supplying more than one-third of all oil India imported, the report noted.
The imports from Russia are now more than the combined purchases from Iraq and Saudi Arabia—India's biggest suppliers in the last decade.
From a market share of less than 1% in India's import basket before the start of the Russia-Ukraine conflict in February 2022, Russia's share of India's imports rose to 1.67 million barrels per day in April, taking a 36% share, as per the report.
According to Vortexa, India imported just 68,600 bpd of oil from Russia in March 2022, and this year the purchases have jumped to 1,678,000 bpd.
Indian refiners in the past rarely bought Russian oil due to high freight costs, but now they are snapping up plentiful Russian cargo available at a discount to other grades as some Western nations rejected it because Moscow invaded Ukraine, the report stated.
The purchases from Russia in March were double of 0.81 million barrels per day (bpd) of oil bought from Iraq, which had been India's top oil supplier since 2017–18. Saudi Arabia has been pushed down to the No. 3 spot with 0.67 million bpd supplies, it said.
Month-on-month, purchases from Russia rose marginally from 1.64 million bpd of oil imported from the country in March. The UAE, which in March overtook the US to become the fourth largest supplier, sold 185,000 bpd, higher than the 119,000 bpd of oil sourced from the US.
Russia is selling record amounts of crude oil to India to plug the gap in its energy exports after the European Union banned imports in December, it added.
In December, the EU banned Russian seaborne oil and imposed a $60-per-barrel price cap, which prevents other countries from using EU shipping and insurance services, unless oil is sold below the cap. Industry officials said Indian refiners are using the UAE's dirham to pay for oil that is imported at a price lower than $60, according to the report.
Disclaimer: The views and recommendations made above are those of individual analysts or broking companies, and not of MintGenie.