7 months ago
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India's crude lipid imports from Russia strengthened successful the archetypal fractional of October, reversing a three-month descent successful arrivals seen during July-September arsenic refineries were backmost connected afloat watercourse to conscionable festive demand, according to vessel tracking data.
Imports from Russia slid from implicit 2 cardinal barrels per time successful June to 1.6 cardinal bpd successful September.
However, tanker-tracking information for aboriginal October suggest a rebound: shipments of Urals and different Russian grades to India person picked up pace, supported by renewed discounts amid slack request successful Western markets and shipping flexibility.
Preliminary information by planetary commercialized analytics steadfast Kpler showed October imports tracking astir 1.8 cardinal barrels per time (bpd), an summation of astir 250,000 bpd from the erstwhile period (though the existent period information is taxable to revision).
The information pertains to the play anterior to U.S. President Donald Trump's October 15 connection claiming Prime Minister Narendra Modi has agreed to halt Russian crude imports. Ministry of External Affairs spokesperson Randhir Jaiswal, however, said helium was not alert of specified a telephone conversation.
‘Pressure tactics’
Sumit Ritolia, Lead Research Analyst (Refining & Modelling) astatine Kpler, believes Mr. Trump's connection was much apt unit tactics linked to commercialized negotiations alternatively than a reflection of an imminent argumentation change.
"Russian barrels stay profoundly embedded successful India's vigor strategy for economic, contractual, and strategical reasons," helium said.
Indian refiners, too, said they person not yet been asked by the authorities to halt Russian lipid imports.
India turned to purchasing Russian lipid sold astatine a discount aft Western countries imposed sanctions connected Moscow and shunned its supplies implicit its penetration of Ukraine successful February 2022. Consequently, from a specified 1.7% stock successful full lipid imports successful 2019-20 (FY20), Russia's stock accrued to 40% successful 2023-24, making it the biggest lipid supplier to India.
In the archetypal fractional of October, Russia continued to bask that status. Iraq was the 2nd biggest crude lipid supplier to India astatine astir 1.01 cardinal bpd, followed by Saudi Arabia astatine 8,30,000 bpd. The U.S. has overtaken the UAE to go India's fourth-largest supplier with 647,000 bpd. UAE supplied 394,000 bpd, according to Kpler.
Vital for India
Mr. Ritolia said Russian crude remains structurally captious for India, accounting for astir 34% of its full imports and offering compelling discounts that are excessively important for refiners to ignore.
"There has been a batch of speech astir the dip successful imports during July-September. This was driven little by tariff concerns and much by seasonal factors, peculiarly accrued attraction enactment astatine PSU refineries specified arsenic MRPL, CPCL, and BORL," helium said.
In fact, astir contracts for deliveries up to aboriginal September were finalised 6–10 weeks successful advance, meaning deals were mostly locked successful earlier July 31. So dips successful July-September were mostly owed to refinery processing little crude successful presumption of attraction schedules.
Even with narrower discounts than successful 2023, Russian barrels stay 1 of the astir economical feedstock options disposable to Indian refiners, owed to landed discounts and precocious GPW (Gross Product Worth) borderline outputs from grades specified arsenic Urals.
Discounts mean betwixt $3.5-5 per barrel, up from $1.5-2 successful July/August.
Replacing Russian crude is not difficult, arsenic much barrels could travel from the Middle East, Latin America, and the U.S., akin to India's pre-2022 crude slate.
Indian refineries tin grip divers crude grades, truthful the method constraint is minimal.
But whether New Delhi is acceptable to marque that displacement is different matter, helium said. "The world is that cutting Russian imports would beryllium difficult, costly, and risky."
Substitution would necessitate accelerated scaling from aggregate suppliers, astatine higher costs (freight, weaker discounts). If margins compress oregon retail prices rise, the effect could beryllium inflation, governmental backlash, and weaker refinery profitability.
He believes refiners won't permission a dollar connected the array unless directed by the authorities - conscionable arsenic happened with Iranian barrels. While determination has been a stronger propulsion for diversification, contracts for Russian crudes are typically signed 6–10 weeks earlier arrival. Rewiring each that takes time. In practice, Indian refiners are gradually broadening their baskets, not to regenerate Russia successful the abbreviated term, but to heighten vigor security, continuity, and flexibility.
India has consistently pursued an autarkic overseas and vigor policy, balancing economical interests with diplomatic relationships. A abrupt displacement distant from Russian crude would undermine its vigor information strategy and is improbable unless ceremonial sanctions — akin to those connected Iran oregon Venezuela — are imposed.
"At this stage, it's improbable that India volition instrumentality structural cuts purely to fulfill US and EU governmental pressure. If Washington intensifies pressure, Indian refiners could marque a token simplification - connected the bid of 100,000-200,000 bpd - to show diversification and appease Western partners. However, these cuts would apt beryllium symbolic alternatively than transformative," helium added.
Importing higher volumes from the U.S. to placate Trump is an option, but the upside is capped astatine astir 400,000-500,000 bpd. This is due to the fact that U.S. grades look some logistical disadvantages, economical and compatibility challenges with Indian refining systems.
Kpler information shows Indian imports of U.S. crude person averaged 310,000 bpd truthful acold successful 2025, an summation from 199,000 bpd successful 2024, hitting a yearly precocious of approx 500,000 bpd (expected successful October).
