India's Import Of Russian Oil Falls To 34% In August

Russia's portion of India's crude oil imports declined to 34 per cent in August, down from 42 per cent in July. This drop occurred because government-run refineries in India significantly reduced their imports from Russia. 

Specifically, Russian supplies to India decreased by 23 per cent month-on-month, totalling 4 1.47 million barrels per day (mbd) in August. This reduction happened even as India's overall crude imports fell by five per cent to 4.35 mbd, as reported by the energy cargo tracker Vortexa. Conversely, Russia's seaborne crude exports to China increased from 1.3 mbd in July to 1.4 mbd in August. 

Indian state-owned refineries received 852,000 barrels per day of Russian oil in August, a 30 per cent decrease compared to July. Meanwhile, private sector refineries took in 617,000 barrels per day, marking a 13 per cent decrease from the previous month. 

The decline in imports from Russia was attributed to planned maintenance work at certain Indian refineries and a reduction in the availability of Russian oil supplies, according to analysts. 

An analyst noted that there is no indication of a near-term rebound in Russia's crude exports to India, suggesting that Indian imports of Russian crude are likely to remain subdued. 

Russia's exports have been shrinking as the country focuses on reducing crude production and meeting its growing domestic fuel demand, according to an industry executive. 

Saudi Arabia emerged as the primary beneficiary of the decrease in Russian supplies to India, boosting its exports to Indian refiners to 820,000 barrels per day in August, a 70 per cent increase from July. 

Consequently, Saudi Arabia's share in the Indian crude market rose to 19 per cent in August, up from 11 per cent in July. The shares of other major suppliers, including Iraq at 20 per cent, the UAE at six per cent, and the US at five per cent, remained relatively stable. 

The analyst noted that the narrowing discounts of Russian Urals crude to dated Brent in recent weeks likely dampened the interest of Indian refiners. In August, Urals, the flagship Russian crude grade, constituted 73 per cent of Russian supplies imported by India, down from 83 per cent in July. 

While Urals had mostly traded below the G7-imposed price cap of USD 60 per barrel, it has surpassed this cap in recent weeks and is currently trading at around USD 69 per barrel, whereas the international benchmark Brent is at approximately USD 88 per barrel. 

It's important to mention that Indian state refiners acquire Russian oil on a delivered-at-port basis, which means they bear transportation and insurance risks. These risks increase when the oil is priced above the cap.