India imported on an average 870,000 barrels of oil per day from Russia in the 12 months through February this year, about 20% of its total crude imports, according to Vortexa.
The dramatic rise in the share of Russia in Indian imports, up from less than 1% in 2021, was driven by the deep discounts at which Russian oil came to be sold following Russia’s invasion of Ukraine that prompted several countries led by the US to impose sanctions on Russia.
The sudden surge in the use of Russian oil, however, does not make Indian refiners extra vulnerable as they have a diversified basket and also because it’s not hard to source supplies in a mature global market, industry executives said.
“Oil is a deeply traded global commodity and it is the techno-economics that ultimately determine its source and destination linkage,” said MK Surana, CEO of Ratnagiri Refinery and Petrochemicals and former chairman of HPCL. “Every barrel produced ultimately has to find its consumer somewhere in the globe. If there is no absolute outage of barrels, it is only a shift in source-destination linkage with related price adjustment.”
On an average, private sector refiners – Reliance and Nayara – imported about 385,000 barrels per day of Russian oil while state-run refiners – Indian Oil, Bharat Petroleum, Hindustan Petroleum and MRPL – imported 484,000 barrels per day in the year after the Ukraine war.
The private sector benefitted from faster decision-making, which helped it snap distressed cargoes, a lot of which became available early in the war, industry executives said.