Russia has now emerged among the top 10 suppliers of crude oil to India. From all the crude oil purchases from overseas, India’s imports from Russia have climbed more than 50 times since April.
With that, Russian oil imports now account for 10% of India’s total crude imports basket. Prior to the Ukraine war, Russian imports were just 0.2% of all the oil imported by India.
An official told reporters, that Russian oil now makes up 10 percent of India’s oil import basket in April. It is now among the top 10 suppliers, as reported by PTI.
Notably, about 40% of Russian oil has been bought by private refiners namely Reliance Industries and Rosneft-backed Nayara Energy.
In May, Indian refiners purchased approximately 25 million barrels of crude oil from Russia.
Also, last month, Russia surpassed Saudi Arabia in becoming India’s second-biggest oil supplier behind Iraq as refiners crowded Russian crude oil that is available at a deep discount in a multi-year high Brent crude and US WTI scenario following the Kremlin’s invasion of Ukraine.
Saudi Arabia is now the third-largest crude oil supplier for India.
India is the third-largest oil consumer in the world with 85% of which is imported, after China and the US.
Due to the conflict with Ukraine, there have been fewer buyers for Russian Ural crude oil as some foreign governments and companies have exited the country’s energy exports which led to a decline in the price.
As per the report, Indian refiners have taken advantage of this and purchased Russian crude oil at discount as high as $30 per barrel.
India has continuously defended its decision for crude oil purchases from Russia even when major western economies issued several sanctions on President Vladimir Putin-led country condemning their invasion of Ukraine.
On May 4, in a press statement, the Ministry of Petroleum & Natural Gas said India’s India’s energy needs are enormous with daily consumption of around 5 million barrels and a refining capacity of 250 MMTPA. For energy security and to fulfill its objective of providing energy justice to each of its citizens, Indian Energy companies buy from all major oil producers in the World. On average, India has the unique distinction of servicing 60 million visitors at its petrol pumps every single day. Despite challenging times, it is important for the Government to ensure access to affordable energy for our citizens.
According to the ministry, India’s top 10 import destinations are mostly from West Asia. In the recent past, the USA has become a major crude oil source for India, supplying almost $13 bn worth of energy imports, with almost 7.3% of the market share of crude oil imports.
The ministry had explained that Indian Energy companies have been sourcing energy supplies from Russia, on a sustained basis, over the past several years. Yearly figures may have varied due to a variety of reasons, including operational necessities. If suddenly, now, as a huge importer of crude oil, India pulls back on its diversified sources, concentrating on the remaining, in an already constrained market, it will lead to further volatility and instability, jacking up international prices.
“Despite attempts to portray it otherwise, energy purchases from Russia remain minuscule in comparison to India’s total consumption,” the ministry had said.