India’s OPEC Imports At All-Time Low As Russian Oil Offers Alternative

OPEC’s share of India’s oil imports plummeted to an all-time low of 46% in April as purchases of cheaper Russian crude peaked, as per industry data.

The Organisation of Petroleum Exporting Countries (OPEC) nations, primarily in the Middle East and Africa, accounted for 72% of all crude oil imported by India in April 2022.

Energy cargo tracker Vortexa claims that this percentage dropped to 46% in April 2023.

At one point, OPEC accounted for up to 90% of all crude oil purchased by India, but this has been declining since Russian oil became available at a discount in the aftermath of Moscow’s invasion of Ukraine in February last year.

For the seventh consecutive month, Russia was the single greatest supplier of crude oil, which is processed into petrol and diesel at refineries, contributing more than one-third of all oil imported by India.

Russia’s imports have now surpassed purchases from Iraq and Saudi Arabia, India’s two largest suppliers in the last decade.

Russia’s market share in India’s import basket increased from less than 1% before the commencement of the Russia-Ukraine crisis in February 2022 to 1.67 million barrels per day in April, accounting for 36% of total imports.

In March, India bought twice as much oil from Russia as it did from Iraq, which had been the country’s main oil supplier throughout 2017–18. Iraq supplied 0.81 million bpd of oil to India during that time. Saudi Arabia has dropped to third place with 0.67 million bpd of supplies.

Month on month, purchases from Russia increased modestly from 1.64 million bpd imported in March. The UAE, which surpassed the US in March to become the fourth largest supplier, sold 185,000 bpd, more than the 119,000 bpd of oil sourced from the US.

Vortexa’s head of Asia-Pacific analysis, Serena Huang said, “India’s imports of Russian crude in April have set a new record once again, but the month-on-month increase has slowed and could possibly be peaking this month”.

Benefits from India’s imports of Russian crude would likely be limited by increased competition for Urals from China.

Huang further said, “OPEC’s crude market share in India has fallen to 46 percent last month, down from 72% a year ago, a multi-year low”.

“OPEC may face an uphill battle in winning back the market share as refiners will ultimately be going for the crude that gives the highest margin, outside of fulfilling their term contracts”, Huang added.

Russia is supplying record amounts of crude oil to India to fill the void left by the European Union’s December ban on imports.

The EU banned Russian seaborne oil in December and imposed a USD 60-per-barrel price restriction, preventing other countries from utilizing EU shipping and insurance services unless oil is sold below the cap. According to industry sources, Indian refiners are using the UAE dirham to pay for oil imported at a price of less than USD 60.

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