40 million barrels of Russian oil bought since February 24; In 2021, Russian oil imports were 16 million barrels
India has bought more than twice as much crude oil from Russia in the two months since its invasion of Ukraine as it did in all of 2021, according to Reuters calculations, when Indian refiners captured discounted oil others had avoided.
Refineries in India have ordered at least 40 million barrels of Russian oil since the February 24 invasion, Reuters calculations based on information from crude oil tenders and traders show. The purchases are loaded in the June quarter.
According to Reuters calculations, this compares to total imports of Russian oil to India of 16 million barrels over the whole of last year.
The world’s third-largest oil importer and consumer ships over 85% of its 5 million barrels per day (bpd) crude oil requirements. Its refiners are buying cheaper Russian oil to partially offset the impact of higher official selling prices from some producers like Saudi Arabia, company sources said.
“We’re trying to protect consumers from price shocks as much as we can, but we also need to protect our profits… so we’re buying Russian oil,” said a refinery official who asked not to be named.
According to Reuters calculations, purchases of Russian barrels by private refiners Reliance Industries and Nayara Energy exceed imports by state refiners Indian Oil Corp, Hindustan Petroleum Corp and Bharat Petroleum Corp.
Reliance has so far bought at least 15 million barrels of Russian oil for the June quarter, trade sources said last week. Reliance did not respond to a request for comment at this time.
Nayara Energy, which is partly owned by Russia’s top producer Rosneft, bought 8-9 million barrels of Russian crude to ship in April-May, trade sources said. Nayara did not respond to a Reuters email asking for comment.
Western sanctions against Russia since its invasion of Ukraine, which Moscow calls a “special operation,” have caused many oil importers to avoid trading with Moscow, driving Russian crude’s price discount relative to other grades to record levels.
Although New Delhi has called for an immediate ceasefire in Ukraine, it has not explicitly condemned Moscow’s actions.
The country’s oil minister, Hardeep Singh Puri, defended India’s oil imports from Russia, saying on Friday that India’s purchases from Russia account for a tiny fraction of the country’s total oil needs.
Indian companies buy Russian oil on a delivery basis, with sellers arranging shipping and insurance.
Washington has already said it does not mind New Delhi buying Russian oil below market prices, but warned that imports could surge as it could hamper the US response to the war in Ukraine.
Analysts said India’s Russian oil imports could slack as full implementation of European and US sanctions could hit logistics from mid-May and late June.
“The capacity of Indian refineries to process Russian oil is limited and there could also be logistical challenges such as insurance, tankers and payment mechanisms once the European and US sanctions against Russia come into effect,” said Giovanni Staunovo, commodities analyst at the UBS Group AG.
Already under the pressure of the sanctions, some trading houses are reducing their deals in Russian oil, he said.
