India's imports of crude oil from Russia touched a new high of 1.64 million barrels per day in March and is now double of the purchases from Iraq - the nation's traditional top oil supplier. But the purchases appear to have plateaued as growth has slowed. Russia continued to be the single largest supplier of crude oil, which is converted into petrol and diesel at refineries, for a sixth straight month by supplying more than one-third of all oil India imported, according to energy cargo tracker Vortexa. Refiners continue to snap up plentiful Russian cargo available at a discount to other grades.
From a market share of less than 1 per cent 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 1.64 million barrels per day in March, taking a 34 per cent share. The purchases from Russia in March were double of 0.82 million barrels per day (bpd) of oil bought from Iraq, which has been India's top oil supplier since 2017-18. India, the world's third-largest crude importer after China and the United States, has been snapping Russian oil that was available at a discount after some in the West shunned it as a means of punishing Moscow for its invasion of Ukraine. Month-on-month, purchases from Russia rose marginally from 1.62 million bpd of oil imported from the country in February.
According to Vortexa, Saudi Arabia was India's second largest supplier of crude oil in March, selling 986,288 bpd. Iraq with 821,952 bpd sales was the third biggest supplier. UAE overtook the US to become the fourth largest supplier at 313,002 bpd. The US supplied 136,464 bpd, down from 248,430 bpd in February. "While India continues to increase its imports of Russian crude month-on-month in March, the growth has slowed," said Vortexa's head of Asia-Pacific analysis, Serena Huang. "Refiners' purchases of medium-sour Russian Urals have remained steady in March, and the increase in imports are attributed to higher purchases of sweeter grades like Novy Port Light."
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India's import of Russian oil could have plateaued. "The plateauing of India's imports of Russian Urals could indicate a soft limit on its ability to take in more sour crude, given its need to fulfill its term contracts with Mideast Gulf producers.
"But domestic refiners do have room to increase their purchases of sweeter grades like Sokol, ESPO blend and Novy Port Light, in the interest of maintaining refining runs high and diversifying its crude sources," Huang said.
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.
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 UAE's dirham to pay for oil that is imported at a price lower than $60. "Almost a quarter of the Russian imports are now paid in dirham," an official said.
According to Vortexa, India imported just 68,600 bpd of oil from Russia in March 2022 and this year the purchases have jumped to 1,646,311 bpd. Year-on-year, imports from Iraq have fallen from 1,139,880 bpd in March 2022 to 821,952 bpd this year. The biggest drop, however, has been in the US imports - from 419,071 bpd to 136,464 bpd. Saudi Arabia is selling more oil as compared to 872,683 bpd it sold in March last year.
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