India increases reliance on Russia, US for crude oil, ditches Middle-East suppliers

India’s import of crude oil from Russia rose to around 2 million barrels per day (bpd) in June, while falling from its traditional suppliers Saudi Arabia and Iraq. Besides Russia, India also ramped up crude oil supplies from the US in the month amid reports of higher inventories in the country.

In June, India imported 1.9 million bpd of crude oil from Russia as compared to 1.7 million bpd in the previous month, showed data from energy cargo tracker Vortexa. Meanwhile, India’s import of crude oil stood at 331,000 bpd from the US, a sharp increase of 63 percent from the last month. India’s rising oil imports from the US comes when the country has been ramping up its oil production.

On the other hand, crude oil imports from India’s traditional Middle-East supplies including Saudi Arabia and Iraq fell in the month. Crude oil imports from Saudi dropped 36 percent while India’s supplies from Iraq declined 23 percent in June.

The Saudi-led oil cartel OPEC+, on June 2, decided to continue the voluntary cuts of 2.2 million barrels per day (bpd) till September 2024. Thereafter, the group plans to phase out the supply cuts over a year, i.e. till September 2025, in a monthly exercise. Iraq and Russia are also a part of Organisation of Petroleum Exporting Countries and its allies (or OPEC+).

In June, India imported 386,000 bpd of crude oil from Saudi Arabia as against 605,000 bpd in May and 753,000 bpd from Iraq in June compared to 972,000 bpd in the previous month. Meanwhile, India’s imports from Venezuela stood at 65,400 bpd in June from 112,000 bpd in the last month.

Russian oil grades
The country’s rising imports from Russia are a reflection of the increase in oil grades India is importing from Moscow. Besides sour grade Urals, India imported other grades including Varandey, ESPO blend, Sokol, Arco and Siberan Light from Russia in June.

Russian Urals continued to remain the major contributor with India buying 1.52 million bpd of the grade from the total imports from the country.

After the war begun between Russia and Ukraine in 2022, the former has become a major supplier of crude oil for India. From supplying only 0.2 percent of India’s total oil imports before 2022, Russia now provides around 40 percent of the total imports.

With the increase in oil trade between the two countries, Indian oil marketing companies (OMCs) are trying to secure a long-term deal with Russia for supply of crude oil at discounted prices.
Source: Money Control