Russia becomes India’s second largest oil exporter, trade sources

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Russian grades accounted for around 16.5% of India’s total oil imports in May

Russia became India’s second-largest oil supplier in May, pushing Saudi Arabia into third place, but still behind Iraq, which remains No. 1, according to data from trade sources.

In May, Indian refiners received around 819,000 barrels per day (bpd) of Russian oil, the highest so far for any month, compared to around 277,000 in April, the data showed.

Western sanctions on Russia for its invasion of Ukraine have prompted many oil importers to avoid trade with Moscow, pushing Russian crude spot prices to record discounts to other grades.

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This provided Indian refiners, who rarely bought Russian oil due to high freight costs, an opportunity to buy cheap crude.

Russian grades accounted for around 16.5% of India’s total oil imports in May and helped lift CIS countries’ share of oil to around 20.5%, while that of the Middle East declined at around 59.5%%, according to the data.

The share of African oil in India’s crude oil imports jumped last month to 11.5% from 5.9% in April, the data showed.

“Diesel is setting the tone…if you want to increase production of diesel and jet fuel, you need Nigerian and Angolan grades. China has reduced imports of Angolan grades due to COVID-related shutdowns, so some of those barrels are going to Europe and some to India,” Refinitiv analyst Ehsan Ul Haq said.

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He said apart from the availability of cheaper Russian barrels, the rise in official selling prices for Middle Eastern oil has also pushed Indian refiners to buy Nigerian crude.

India’s oil imports in May totaled 4.98 million bpd, the highest since December 2020, as state-owned refiners ramped up output to meet growing local demand while private refiners stepped up on exports, according to the data.

India’s oil imports in May were up about 5.6% from the previous month and about 19% from a year earlier, according to data obtained from the sources.

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India has defended its purchase of “cheap” Russian oil, saying imports from Moscow represent only a fraction of the country’s overall needs and that a sudden stop would drive up costs for its consumers.

Rising oil imports from Russia reduced OPEC’s share of India’s total imports to 65% in April.

(Reporting by Nidhi Verma; editing by David Evans)

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