India's Russian Oil Imports Hit 7-month Low In August
India's imports of Russian oil have reached a seven-month low in August as the nation's refiners scaled back purchases due to planned maintenance outages at some refineries and diminishing discounts for Russian oil grades.
In stark contrast, oil imports from Saudi Arabia have surged to a multi-month high during the same period, according to preliminary data from energy market analytics firms Kpler and Refinitiv.
Indian refiners had been capitalising on discounted Russian oil following the decision by certain Western buyers to decrease purchases in response to Russia's full-scale invasion of Ukraine in February of the previous year. However, the momentum has shifted since June, as monthly imports of Russian oil into India have gradually waned due to shrinking discounts.
The decline in discounts for Russian oil loading in October, falling below USD 5 per barrel in comparison to the benchmark dated Brent, seems to have played a role in dampening Indian interest in the commodity. Reuters sources have revealed that companies have not yet placed orders for Russian oil set to load in October, underscoring the shift in market dynamics.
One factor that had boosted the appeal of Russian oil to Indian refiners was the flexibility it offered through spot market purchases, in contrast to the mostly annual contracts that underpinned Middle Eastern oil imports.
A government source highlighted concerns to Reuters that Indian refiners might consider reducing their imports of Russian oil, as the narrowing discounts have driven the prices of Russian oil grades above the USD 60 per barrel ceiling established by Western nations.
Statistics underscore the shift in India's oil import landscape. August saw a 20 per cent decline in India's Russian oil imports compared to July, marking a daily average of about 1.5 million barrels. Conversely, imports from Saudi Arabia during the same period surged by an impressive 63 per cent, reaching a daily average of 8,25,000 barrels, up from 5,22,000 barrels in July.
(Inputs from Reuters)
