India’s Oil Imports Surge: Russia Hits Record High, Saudi Arabia Drops

By Majorwavesen

India’s oil imports from Russia have reached an unprecedented high of approximately 2.1 million barrels per day (bpd) in May, driven by widening discounts on Russian oil due to decreased demand from China. This surge has pushed Russia’s share in India’s oil market to nearly 41%, solidifying its position as the top supplier to the world’s third-largest oil importer and consumer.

Conversely, imports from Saudi Arabia plummeted to a 10-month low. This decline is attributed to Saudi Aramco’s decision to raise term prices for the second consecutive month in May. Despite this, India’s overall oil imports in May grew by 5.6% from April, reaching about 5.1 million bpd. Specifically, Russian oil imports rose by 14.7% from the previous month and 5.9% from a year earlier.

Indian refiners have capitalized on discounted Russian crude, which has become more economically attractive than similar grades from the Middle East. The geopolitical ramifications of the Ukraine invasion have led many European nations to reduce their reliance on Russian oil, allowing India to secure these discounted supplies. This strategic shift not only ensures a stable supply for India but also helps reduce import costs.

Interestingly, India’s broader oil import strategy includes increasing purchases from the United States. As of the fiscal year 2023-24, India has been importing more U.S. crude, diversifying its sources and enhancing energy security. This diversification has come with significant economic advantages; India paid 16% less for the same volume of oil compared to the previous fiscal year, underscoring the financial benefits of a diversified import portfolio.