India cuts Russian oil imports and looks for alternatives — Bloomberg
Photo: India is forced to cut back on Russian oil purchases (Getty Images)
Indian refineries are being forced to cut back on Russian oil imports from their current elevated levels. The main reason is Ukraine's successful strikes on Russian infrastructure, which have significantly disrupted export shipments, according to Bloomberg.
Due to pressure on Russian oil exports, Indian companies have begun actively seeking alternative sources of crude. Buyers are turning their attention to crude from West Africa, the Americas, and the Persian Gulf countries, despite tensions in the region stemming from the conflict between the US and Iran.
This shift in procurement patterns is occurring against the backdrop of expected growth in domestic demand in India. Oil refineries are completing scheduled maintenance on their equipment, which will allow them to significantly increase production volumes in the near future.
Import volumes decline and emergency purchases
According to Sumit Ritolia, a senior modeling manager at the analytics firm Kpler, imports of Russian oil to India will fall to approximately 2 million barrels per day this month. This is a significant decline compared to July's peak of 2.8 million barrels.
The expert attributes this to market normalization following a period of active purchasing, a decline in the availability of Russian exports, and increased competition for crude from China. At the same time, analysts expect that supplies from Russia to India will stabilize slightly above the 2 million barrels per day mark going forward.
Against this backdrop, the country's largest refiner, Indian Oil Corp., has already announced a series of tenders to purchase crude oil from the United States and the Persian Gulf. Hindustan Petroleum Corp. and Mangalore Refinery & Petrochemicals Ltd. also joined in urgent deals to purchase non-Russian crude this week.
Ukrainian strikes impact on Russian exports
The situation on the global market is further complicated by the conflict in the Middle East and the war Russia has waged against Ukraine. A series of strikes by Ukrainian drones on Russian oil refineries and Black Sea ports has caused a fuel shortage within Russia and prevented Moscow from redirecting crude oil to foreign markets.
According to tanker tracking data, over the past four weeks, total Russian oil exports have fallen to 3.5 million barrels per day, down from a July high of over 4 million barrels.
Reuters reported that global oil prices had fallen by about 3% over the past 24 hours. This trend has been observed for several days now.
China is rapidly increasing its purchases of Russian oil to replace supplies from the Middle East. This is causing a shortage of crude in India and could lead to an acute fuel shortage across Asia.
