India's Russian Oil Imports Plummet Amid US Pressure

Strategic Insights -

The Indian government has been reducing its purchases of Russian oil as the US and Western powers apply pressure on India to abandon Moscow's energy imports. US President Donald Trump said that he "heard" India would no longer buy oil from Russia, calling it a "good step", but also added that he is not sure if the information is "right or not". Meanwhile, India maintains that its oil purchases are commercial decisions based on market conditions.

Key Takeaways:

  • India's imports of Russian oil in July were 1.6 million barrels per day (bpd), down 24% from June levels and 23.5% from July 2024 volumes, according to Kpler data.
  • The share of Russian crude in India's oil import basket in July contracted to around 33.8% from June's 44.5%, with private sector refiners also reducing their exposure to Moscow's oil.
  • Industry insiders and experts expect India to negotiate a potential wind-down period for reducing supplies, as replacing the massive volumes of Russian oil supply overnight is impossible.
  • India has diversified its crude sourcing slate from 27 countries to around 40 countries, with enough oil available globally for India to buy and ensure energy security, according to Petroleum Minister Hardeep Singh Puri.
  • A loss of discounted Russian barrels would push up the relative cost of imports by a few dollars a barrel, inflating India's oil import bill by billions of dollars on an annualised basis.
  • Indian refiners will have to grapple with significant constraints as they reduce Russian oil imports, including pricing rigidity, freight volatility, and availability constraints from traditional suppliers in West Asia.

Statistics:

  • India's Russian oil imports in July were 1.6 million bpd, down 24% from June levels and 23.5% from July 2024 volumes.
  • The share of Russian crude in India's oil import basket in July contracted to around 33.8% from June's 44.5%.
  • India has diversified its crude sourcing slate from 27 countries to around 40 countries.
  • A loss of discounted Russian barrels would push up the relative cost of imports by a few dollars a barrel, inflating India's oil import bill by billions of dollars on an annualised basis.
  • India's top suppliers of crude oil in July were Russia (1,599 thousand barrels per day), Iraq (926 thousand barrels per day), Saudi Arabia (702 thousand barrels per day), and the UAE (446 thousand barrels per day).

Sources:

  • Kpler, "Latest vessel tracking data"
  • Indian Express, "India's massive Russian oil imports at a four-month low: data"
  • Ministry of External Affairs Spokesperson Randhir Jaiswal, "We take decisions based on the price at which oil is available in the international market and depending on the global situation at that time"
  • Sumit Ritloia, Lead Research Analyst, Refining & Modeling at Kpler, "Replacing Russian crude isn't plug-and-play...it is no easy feat--logistically daunting, economically painful, and geopolitically fraught"
  • Petroleum Minister Hardeep Singh Puri, "I don't feel any pressure in my mind. India has diversified the sources of supply...I'm not worried at all"