Russia replaces UAE as the top naphtha supplier to India in 2024-25

Russia has surpassed the United Arab Emirates as India's top naphtha supplier in the year to March 2025, as refiners capitalise on discounted cargoes, preliminary ship-tracking data showed, a trend buyers expect to persist for another year.

India, the world's third largest crude importer and oil consumer, has been relying on cheap oil from Russia to reduce import costs despite Western efforts to curtail Moscow's revenues during the Ukraine war. Russia has been India's top crude supplier for the past two years.

India imported about 3 million tonnes (74,000 barrels per day) of naphtha from April 2024 to March 2025, with Russia supplying more than half, up from just 14 per cent-16 per cent of the total in the previous year, ship-tracking data from OilX and Kpler showed.

Russian naphtha from Ust-Luga, Sheskharis and Novorossiysk ports arrived at the western Indian ports of Mundra, Hazira, and Sikka, ship-tracking data showed, for petrochemical plants of HPCL Mittal Energy Ltd (HMEL) and Reliance Industries.

"We will buy from wherever it is cheaper," HMEL Managing Director & Chief Executive Officer Prabh Das told Reuters on Wednesday at an industry gathering, without commenting on its Russian oil purchases. RIL did not respond to a request for comment.

Russian naphtha was $14-$15 per tonne cheaper than Middle Eastern product as of this week, two trade sources said.

India ranks only seventh among Asian naphtha importers, Kpler data showed, but imports will rise due to growing domestic petrochemicals demand and upcoming crackers in the next 3-4 years.

Meanwhile, the UAE's share, mainly from Abu Dhabi National Oil Co, dropped to just over 20 per cent, nearly half of its level in the same period, the data showed.

"Prices have been attractive for us and we will continue to purchase from them (Russia)," a source at an integrated refining complex in northern India said, adding that margins in Indian market are lower than their expectation so far this year, so refiners will prefer cheaper feedstock.

Russia diverted naphtha exports to Asia after Europe banned Russian oil imports over the 2022 Ukraine invasion.

The Trump administration is working on a Ukraine ceasefire deal which could lead to the lifting sanctions on Russian oil, analysts said.

However, Asian countries may remain as Russia's top oil buyers as Europe may still avoid Russian imports even if U.S. sanctions are lifted, Rystad Energy analyst Jorge Leon said.