India Becomes Leading Importer of Russian Oil, Surpassing China
India's oil imports from Russia were valued at $48.63 billion in 2023 and $12.54 billion in the first half of 2024. Discover how India emerges as the top importer of Russian oil, overtaking China.
India surpassed China to become the world's top importer of Russian oil in July, marking a significant shift in the market. A record 2.07 million barrels per day (Bpd) of Russian crude were processed by Indian refineries last month, accounting for 44% of India's total oil imports, according to Reuters. This represents a 12% annual increase and a significant surge from June. India’s Oil imports accounted for $140.36 billion in 2023. India’s oil imports from Russia accounted for $48.63 billion in 2023 and $12.54 billion in the first quarter of 2024. The oil import quantity of India’s oil imports from Russia in 2023 was 88.92 million tons.
India, the third-biggest oil importer and consumer in the world purchased $2.8 billion worth of oil from Russia in July 2024, second only to China, which continues to be the country that imports the most Russian oil. Based on the recent official figures, India imported $14.7 billion worth of crude oil from Russia during the first quarter of June. This was 25% more than at the same time the previous year, and India's increasing demand for Russian crude relative to other nations and its increased availability were factors in the development story. In this article, we will delve deep into the reasons why India became the leading importer of Russian oil, beating China.
China's demand declines as India's Russian oil purchases rise
Chinese refiners have reduced their purchases of Russian oil as a result of declining fuel production profit margins. India now has more access to cheaper Russian crude as a result of the decline in Chinese demand, which has proven increasingly important in maintaining the stability of world oil prices despite continuous geopolitical concerns. An Indian refining source stated, "As long as there is no additional tightening of sanctions, India's demand for Russian oil will go up."
Record volumes of Russian oil are consumed by Indian refineries
Russian oil, specifically the ESPO Blend, has been especially widespread with the aid of Indian refiners. In July, imports of this oil expanded drastically to 188,000 barrels per day. This trade is part of a larger trend as Indian refineries adjust to the shifting dynamics of the sector oil trade by the usage of large Suezmax vessels to carry petroleum. Since Russia invaded Ukraine in February 2022, there has been a consistent pattern that shows the upward thrust in India's oil imports from Russia. India's rising oil purchases from Russia have played an important role in limiting inflation and maintaining solid global pricing.
China Reduces Its Usage of Russian Oil
The flow of Russian oil has shifted from China to South Asia because of declining Chinese demand for Russian oil, which is often on account of decreased earnings margins. This alters the whole oil marketplace and forces buyers to reconsider their go-to processes. Russian ESPO Blend crude flows from its normal Chinese consumers to Indian markets as India keeps up its increasing imports of Russian oil. This modification demonstrates India's expanding participation in the world oil market as well as its calculated use of cheap Russian crude.
India’s Oil Imports from Russia in the last decade
| Year of imports | Oil import value ($) | Oil import quantity (tons) |
| 2013 | $82.19 million | 113.31 thousand tons |
| 2014 | $168 million | 201.83 thousand tons |
| 2015 | $71.25 million | 144.64 thousand tons |
| 2016 | $83.95 million | 279.88 thousand tons |
| 2017 | $1.30 billion | 3.05 million tons |
| 2018 | $1.22 billion | 2.22 million tons |
| 2019 | $1.46 billion | 2.94 million tons |
| 2020 | $927.22 million | 2.62 million tons |
| 2021 | $2.30 billion | 4.54 million tons |
| 2022 | $25.53 billion | 37.02 million tons |
| 2023 | $48.63 billion | 88.92 million tons |
| 2024 (quarter 1) | $12.54 billion | 179.27 thousand tons |
Why India is Turning to Russian Oil
- Diversification of Energy Sources
India, as one of the biggest importers of oil in the world, has been actively searching to diversify its oil and energy assets. Amid uncertainties within the Middle East and the growing power demand, the nation is calling for various options to steady its energy wishes.
- Geopolitical Considerations
In recent years, India-Russia trade relations have seen an extensive increase, especially in the energy zone. This has brought about closer cooperation between the 2 nations, with Russia presenting attractive offers to India for its oil imports.
- Economic Factors
The fierce pricing of Russian oil has also played a vital role in India's choice to increase its oil imports from Russia. The cost-effectiveness of Russian oil compared to other sources has made it a desired desire for India's developing mineral and energy needs.
Conclusion
In conclusion, India's upward thrust as the leading importer of Russian oil, surpassing China, marks a large improvement within the worldwide panorama. As each international location deepens its electricity cooperation, the implications of this shift are in all likelihood to be felt throughout the globe. India's development has an impact on the oil market underscoring the significance of strategic partnerships in ensuring energy security in a growing interconnected world.
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