 "Oil imports, Crude oil")
India’s intake of Russian crude oil slid to a three-year low in December, as refiners grew increasingly cautious amid tightening western sanctions on Moscow’s petroleum sector. Even so, Russia remained India’s largest oil supplier by a wide margin compared with November.
Crude oil imports from Russia fell by about 38 per cent in December from the previous month to 1.14 million barrels a day, according to data from maritime intelligence firm Kpler. India had imported 1.83 million bpd of Russian crude in November.
US President Donald Trump had imposed sanctions, from November 21, on two major Russian oil producers, Rosneft and Lukoil, which together account for about 60 per cent of India’s oil imports from Moscow. In parallel, under the European Union’s 18th sanctions package, the bloc banned imports of refined oil products derived from Russian crude.
Indian refiners have scaled back purchases of Russian crude in response to the latest western measures, despite Moscow offering steeper discounts. Russia has doubled discounts for Indian buyers to around $5 a barrel following the US sanctions, two industry executives told Business Standard. Russian President Vladimir Putin, during a visit to India earlier this month, also assured New Delhi of Moscow’s readiness to ensure uninterrupted fuel supplies.
Despite the sanctions, Rosneft remained India’s largest Russian crude supplier in December, while Lukoil also contributed significant volumes. Kpler data show Rosneft supplied about 667,000 bpd, while Lukoil provided 46,000 bpd to Indian refiners during the month.
The decline comes even as Rosneft-backed Nayara Energy continued strong purchases from Russia, while Mukesh Ambani-led Reliance Industries, India’s largest buyer of Russian crude, secured a one-month concession from Washington to continue buying Rosneft cargoes, Reuters reported.
Reliance had a long-term contract to purchase nearly 500,000 bpd of crude from Rosneft. However, the private refiner has stopped importing Russian oil into its export-focused special economic zone refinery at Jamnagar in Gujarat. Russian cargoes arriving on or after November 20 are instead being processed in the company’s domestic tariff area facilities, Reliance earlier said.
Analysts, however, believe the fall in imports reflects a near-term adjustment rather than a structural shift, with purchases likely to recover gradually from January as new intermediaries emerge and supply chains are reconfigured.
“As long as broader secondary sanctions are not enforced, India is expected to continue importing Russian barrels as economics support the case, albeit increasingly through indirect and less transparent channels, keeping these barrels structurally embedded in India’s crude basket,” said Sumit Ritolia, lead research analyst for refining and modelling at Kpler.
In December, Nayara Energy bought the largest volume of Russian crude among Indian refiners, followed by state-owned Indian Oil Corporation Ltd and Reliance Industries, according to Kpler. Hindustan Petroleum Corporation Ltd (HPCL) and Mangalore Refinery and Petrochemical Ltd (MRPL) did not purchase any Russian cargoes during the month.
Unlike private refiners, state-owned companies such as Indian Oil, Bharat Petroleum Corporation, HPCL and MRPL typically buy Russian oil through traders, insulating them from the direct impact of sanctions.
To offset reduced Russian supplies, Indian refiners increased their reliance on West Asian producers in December, including Iraq, Saudi Arabia, the UAE and Kuwait. India imported 982,000 bpd of crude from Iraq, 732,000 bpd from Saudi Arabia, 566,000 bpd from the UAE and 330,000 bpd from the US during the month.
