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India's January oil imports from Russia hit lowest point in 12 months

India's January oil imports from Russia hit lowest point in 12 months Photo: Russian oil supplies to India continue to decline (Getty Images)

India's crude oil imports from Russia fell for the second consecutive month to the lowest level in a year due to the sanctions of the Western countries, reports Reuters.

The world's third-largest oil importer and consumer has increased its imports of Iraqi oil to offset falling imports of Russian oil, according to the data.

Imports from Russia decreased by 4.2% to 1.3 million barrels per day. Data from the Vortexa vessel tracking agency showed a 9% drop in production to 1.2 million barrels per day.

"The narrowing of Russian crude discounts versus Middle Eastern crude, recent U.S. sanctions on shipowners carrying Russian crude above the price cap and rising tanker premiums as a result of the Red Sea attacks have made Russian crude less attractive for Indian refiners in recent months," said Serena Huang, Vortexa's head of APAC analysis.

Supplies to India may continue to decline

Huang added that imports of Russian oil to India may decline further in the coming months.

Last year, India became the largest buyer of marine oil from Russia, which was sold at a discount after Western countries stopped imports following Russia's invasion of Ukraine.

However, in December, Washington imposed sanctions on vessels and vessel operators carrying Russian oil that sells for more than $60 a barrel. Banks and service providers were asked to ensure that the cargo does not violate the price limit.

Due to the sanctions, several tankers that were supposed to deliver Sokol crude oil to India were diverted.

India wants oil in February

Reuters writes that in February India plans to receive at least five shipments of Sokil crude oil, although it did not receive any in January.

The vessel Jaguar is expected to be unloaded at the private Nayara Energy refinery at the port of Vadinar in the western state of Gujarat on Thursday.

Strengthening of sanctions

Western sanctions led to the fact that half of Russian exports of oil and petroleum products went to China in 2023, while India's share increased to 40% in two years. Europe's share of oil exports from Russia fell tenfold to about 4-5% from about 40-45%.

Oil flows from Russia have faced problems after U.S. sanctions against traders and shipping companies tightened. The signs came just weeks after the U.S. Treasury Department had imposed the most extensive sanctions against Russian oil traders and the state shipping company Sovcomflot since the start of the war against Ukraine.

Recently, the U.S. introduced new sanctions for the transportation of Russian oil. Almost 20 tankers got under restrictions.