India's imports of Russian oil touched all-time high in February and were higher than the combined imports from traditional suppliers Iraq and Saudi Arabia.
In February, Indian imports of Russian crude oil soared to a record 1.6 million barrels per day (bpd), according to energy cargo tracker Vortexa. It amounted to around 35 per cent of all oil imports.
February was the fifth straight month in which Russia was India's single-largest supplier of crude oil, which is later refined into petrol and diesel.
Since the Russian invasion of Ukraine in February 2022, Russia is selling discounted oil amid Western sanctions. Countries like India and China are purchasing the discounted oil that does not go down well with the West that considers such purchases as fuelling the Russian war machinery as the Russian economy —and war-waging capabilities— are highly dependent on its energy exports.
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While India has rejected the Western criticism at continued purchases of Russian oil, data shows that Indian purchases indeed skyrocketed post-invasion.
From a market share of less than 1 per cent in India's import basket before the Ukraine War in February 2022, Russia's share of India's imports rose to 1.62 million barrels per day and around 35 per cent in February.
India seizing the moment
India 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. India is the world's third-largest crude importer after China and the United States.
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The rise in Russian imports have been at the expense of Saudi Arabia and United States. Oil import from Saudi fell 16 per cent month-on-month and that from the USA declined 38 per cent.
According to Vortexa, Russia now accounts for more than the combined oil bought from Iraq and Saudi Arabia — India's mainstay oil suppliers for decades.
Iraq, whom Russia has toppled to become the largest oil source for India, supplied 9,39,921 barrels per day (bpd) oil in February while Saudi supplied 6,47,813 bpd oil. UAE overtook the United States to become the fourth largest supplier at 4,04,570 bpd. The USA supplied 2,48,430 bpd, down from 3,99,914 bpd in January.
Iraq and Saudi supplies are the lowest in 16 months.
"Indian refiners are enjoying a boost in refining margins from processing discounted Russian crude...Refiners' import appetite for Russian barrels are likely to remain robust as long as the economics are favourable, and financial and logistical services to support the trade are available," said Vortexa's Serena Huang, head of Asia-Pacific analysis.
How India is buying Russian oil within price cap
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 USD 60-per-barrel price cap, which prevents other countries from using EU shipping and insurance services, unless oil is sold below the cap.
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Industry officials said Indian refiners are using UAE's dirham to pay for oil that is imported at a price lower than USD 60.
"Almost a quarter of the Russian imports are now paid in dirham," an official said.
(With PTI inputs)
