Russia Remains India’s Leading Oil Supplier, Despite Red Sea Challenges

Russia continued to be India’s top oil supplier in 2023, accounting for over 35% of the nation’s total petroleum imports, or 1.7 million barrels per day (b/d), according to statistics from S&P Global. Analysts predict that this trend will continue into early 2024 despite recent difficulties like payment barriers, logistical problems and shipping issues that have caused a pause in Russian flows.

While the Red Sea attacks have raised worries about diversions and higher shipping expenses, Russian crude shipments to India have not been impacted. For traders providing Russian oil to Indian refiners, the Red Sea route remains the go-to choice. There have been no noticeable changes to the routes for Russian oil that is headed for India, according to data from S&P Global Commodities at Sea.

The import of Russian crude has temporarily decreased recently. Still, analysts believe an increase in the coming months due to several factors, including increased flows from the Middle East, weather-related problems at Russian ports, refinery maintenance, and increased scrutiny of ships carrying Russian oil. Post-maintenance crude runs are expected to rise due to strong refining margins and the need to fulfil growing seasonal demand.

Analysts believe the payment issue is transitory and won’t affect future cargoes from Russia, even though Western sanctions and payment-related problems were hurdles to Sokol crude imports last month. Officials from the Indian government denied any payment difficulties, blaming the decline in imports on less appealing prices and lower profit margins instead.

Hardeep Singh Puri, the Minister of Petroleum for India, stressed that although the Red Sea attacks created a chaotic situation, India is confident in its ability to overcome the obstacles. The government is keeping a close watch on events to guarantee a steady supply of petroleum. Russian crude imports account for a sizable portion of India’s imports, and this pattern is expected to continue shortly despite present worries.

Reference: SPGlobal

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