Russia supplied a record 1.64 million barrels per day (mbd) of crude to Indian refiners in March, higher than 1.58 mbd in February, Vortexa estimates. This was the slowest pace of growth in the past four months, with Russian oil’s share in Indian imports shrinking marginally from 34.5% in February to 34% in March.
The month-on-month rise in imports of Russian crude was mainly driven by purchases of sweeter grades, with buying of flagship Urals remaining steady.
“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 fulfil its term contracts with Mideast Gulf producers,” said Serena Huang, analyst at Vortexa.
“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.”
The share of Urals in Russian oil imported by India fell to 71% in March from 75% in February and 80% in March. Urals traded around $49 per barrel last week, while Sokol and ESPO were priced at $67-69 per barrel.
Indian refiners can easily pay in dollars for Urals as it’s priced below the cap of $60 imposed by the West but have to seek alternative currencies to pay for other Russian grades, industry executives said. Increasing the share of non-Urals in Indian imports means a tougher payment process for refiners, they added.
Second-largest Supplier
India’s import of seaborne Russian crude was higher than China’s 1.4 mbd and Europe’s 300,000 barrels per day (bpd) in March. India imported 203,000 bpd of Russian refined products in March, a bit lower than 220,000 bpd in February. China imported 217,000 bpd and Europe 503,000 bpd.
Private sector refiners accounted for 52% of 1.85 mbd of crude and refined products India imported from Russia.
The share of Iraq, the UAE and the US declined in Indian imports. But Saudi Arabia’s share in Indian imports rose from 15% in February to 20% in March.
“Saudi Arabia will be keen to retain its market share by pricing its crude more attractively, especially in the current environment of bearish demand sentiments and seasonal maintenance upcoming in Asia,” said Huang.
Saudi Arabia was the second-largest supplier to India, with Iraq and the UAE being the third and fourth-largest suppliers, respectively, in March.
The Sunday decision by OPEC+ to curb supplies has pushed up global oil benchmarks, which would in turn boost Russian crude prices as well.
