India's Russian Oil Import Reaches New High In June, Signs Of Declining Growth

India's purchases of Russian oil reached a record high in June, but the rate of growth was the slowest since October, according to tanker data obtained by Reuters from trade sources on Wednesday. This indicates that India's demand for Russian oil may have reached its peak. 

Indian refiners, being the world's third-largest importers of Russian oil, had been heavily relying on the raw material as it was sold at discounted prices after western countries refrained from buying from Moscow due to its invasion of Ukraine. However, the attractiveness of Russian oil has diminished for Indian refiners as the discounts have narrowed, and payment settlement issues have emerged, prompting them to look for alternative sources in the Middle East. 

In June, India imported nearly two million barrels per day (bpd) of Russian crude, showing only a slight increase from the previous month. Before the Ukraine conflict, India rarely purchased oil from Russia due to high shipping costs. 

In that same month, India's imports of Russian oil exceeded its combined purchases from Iraq and Saudi Arabia, the second and third-largest suppliers to New Delhi, as per the data. Additionally, the United States became the fourth-largest oil supplier to India, pushing the United Arab Emirates to the fifth spot. 

During the first quarter of India's fiscal year (April-June), Russia accounted for approximately 42 per cent of India's crude oil imports, while the Middle East's share rose to about 41 per cent, after declining in the preceding three months. 

The data also revealed a significant decrease of about 34 per cent in imports from the Middle East during the June quarter compared to the previous year, while imports from the C.I.S. nations (Azerbaijan, Kazakhstan, and Russia) nearly tripled. 

Consequently, the reduced imports from the Middle East resulted in a decline in OPEC's share in India's overall crude imports.