oil imports: India’s oil imports from Russia seen peaking in May amid China competition

New Delhi: Russia remained the top crude supplier to India in April, further improving its market share to 36%, but a slow month-on-month increase fuelled expectations that the imports from the country could peak in May. That’s being attributed to competition from China for the oil.

Russia supplied 1.68 million barrels a day (mbd) of crude to Indian refiners in April, 4% higher than 1.61 mbd in March, according to energy cargo tracker Vortexa. China imported 1.3 mbd by sea from Russia while Europe imported 206,000 barrels per day in April.

India’s overall crude imports fell 3.5% to 4.6 mbd in April from March. Russia’s share in India’s crude imports expanded to 36.4% in April from 33.8% in March. This compares to a share of 0.2% before the Russia-Ukraine war.

However, the increase in imports of the deeply discounted Russian oil has slowed in recent months. After rising sequentially by 29% in December and 26% in February, the increase slowed to 1.8% in March and 4% in April.

Indian Refiners Focus on Europe for Exports
Iraq’s share in the Indian market shrank to 17.6% in April from 18.4% in March, while Saudi Arabia’s share dropped to 14.5% from 21%. The UAE’s share fell to 4% from 6.5%. The US and Africa marginally gained.”India’s imports of Russian crude in April have set a new record once again, but the month-on-month increase has slowed and could possibly be peaking this month. Increased competition for Urals from China will likely put a lid on upsides to India’s imports of Russian crude,” said Serena Huang, an analyst at Vortexa.Urals, the Russian flagship mid-sulphur crude, has been the biggest draw for both India and China as it has sold at a deep discount to the global benchmark Brent. It’s easier to ship Urals and pay for it as it’s mostly traded below the G7-imposed price cap of $60 per barrel on Russian oil.

India’s import of Urals rose 9% in April over March when it had registered a 5% month-on-month decline. The share of Urals in Russian oil imported by India rose after several months in April to 73.6% from 70% in March and 79% in January. The share of ESPO, another Russian grade, nearly doubled to 10.5% in April from March.

India’s imports of Russian refined products fell 31% sequentially to 125,000 barrels per day in April. Chinese imports of Russian products increased 44% to 321,000 barrels per day while Europe’s remained steady at around 479,000 barrels per day.

“While India’s clean product exports in April have fallen by 25% month-on-month, exports to Europe have remained robust, amid a supportive arbitrage,” said Huang.

India exported 264,000 barrels per day of refined products to Europe in April compared with 285,000 barrels per day in March. Its exports to the US fell to 30,000 barrels per day in April from 106,000 barrels per day in March. Better margins in the European market have shifted Indian refiners’ focus away from the US to Europe. Europe, the biggest market for Russian crude as well as refined products before the Ukraine war, is seeking supplies from elsewhere in the world after deciding to largely cut dependence on Russia.