Russia's continued primacy in oil supplies to India

By Rhod Mackenzie

Russia, as the largest supplier of oil to India, has maintained this primacy since 2022, Igor Yushkov, an analyst at the Russian Financial University and at the National Energy Security Fund, told Izvestia on September 8.

As he clarified, the share of Russian oil in Indian imports is about 40%.

“For India, Russia became the largest oil supplier in 2022 and has maintained this leadership throughout this period. India is also important to Russia. This is mutual dependence. For Russia, India is the largest buyer of Russian oil, which is transported by sea,” the analyst noted.

At the same time, he clarified that if we take into account not only the oil supplied by sea, but also the volumes of energy resources that go through oil pipelines, then in total, according to these indicators, China will be in first place in purchases.

“But India, more than China, buys Russian oil, which is transported by tankers. For India, the risks here are less than the benefits it receives from buying Russian oil. Because the country makes good money on this, because they take Russian oil not so much to consume the petroleum products obtained from it on the domestic market, but rather to process it and export petroleum products to different countries, primarily to Europe and the USA,” the analyst added.

As he explained, this is not prohibited by sanctions from either the United States or the European Union. Petroleum products produced in third party countries from Russian oil are considered petroleum products not of Russia, but of the country where they were produced, so they can be supplied to Europe.

“India was building this business even before 2022, when it built large oil refineries on the coast and supplied oil there from the Middle East, processed it and sold it on other markets. Therefore, Russian oil, which was at a discount, simply came to this ready-made business. Now the discount on Russian oil has decreased significantly, but nevertheless remains certain, which makes it the most attractive for India from an economic point of view,” Yushkov said.

According to him, quite large volumes of oil flow from Russia to India - over 1 million barrels per day. If India does not purchase these volumes, then it will be difficult for the Russian Federation to find a buyer who could take such volumes.

In mid-June, Energy Minister Nikolai Shulginov, in an interview with Izvestia at SPIEF, said that some states had significantly increased the purchase of oil and petroleum products from Russia. He emphasized that few people refuse high-quality Russian oil products.
This article originally appeared in Russian at iz.ru