Indian refiners saved $7 billion from Russian crude imports in 14 months

Indian crude oil refining companies were able to save around $7.17 billion in foreign exchange in the 14 months up to May 2023 by increasing their purchase of discounted Russian crude oil in the aftermath of the breakout of war in Ukraine, The Indian Express (IE) has reported.

India is the world's third-largest crude oil consumer and imports more than 85 per cent of its oil needs. Since Western countries cut their oil imports from Russia as President Putin decided to invade Ukraine in February 2022, Moscow has been selling its crude at steep discounts. 

Indian refiners have been playing to their strengths by purchasing discounted oil from Russia. The volumes of purchase have gone up so much that from being a marginal supplier to India, Russia became the top oil supplier for India, thanks to the discounts.

The total value of India's oil imports for the period between April 2022 to May 2023 stood at $186.45 billion. If Indian refiners had paid for Russian oil, the average of what they paid for oil imported from other suppliers, the bill would have been $196.62 billion, the analysis reported in IE shows.

India imported about $40 billion worth of crude oil from Russia. The average landed price for the Russian crude was $79.75 per barrel, which is about $14.5 less than the average price of oil from countries other than Russia, The Indian Express report said.

At 280.41 million tonnes, Russian crude oil accounted for 24.2 per cent of India's total oil imports in the 14 months under consideration. As the oil imports from Russia grew, Moscow replaced traditional suppliers like Iraq and Saudi Arabia, which are India's biggest suppliers under normal circumstances. Iraq was the second-biggest supplier with a market share of 21 per cent by volume, whereas Saudi Arabia accounted for 16.4 per cent of oil supply to India, the IE report added.