India's imports of Russian crude oil climbed to a record high in June, with preliminary ship-tracking data from LSEG and Kpler showing the world's third-largest oil importer received around 2.70 million barrels per day (bpd) of Russian crude, according to Reuters. This marked a sharp increase from May levels, when Kpler estimated India's Russian oil imports at 2.13 million bpd and LSEG pegged them at 1.95 million bpd.
Drivers Behind the Surge
Russian crude accounted for more than 50% of India's total oil imports in June, a significant increase from 36.5% in May, reinforcing Moscow's position as India's largest crude supplier, according to Kpler data. Indian refiners have increasingly relied on Russian oil since 2022 after Western sanctions over Moscow's invasion of Ukraine prompted many European buyers to avoid Russian crude, leading to discounted supplies that attracted Indian buyers. The latest jump in imports also reflects refiners' efforts to compensate for reduced availability and uncertainty surrounding Middle Eastern supplies during the Strait of Hormuz crisis.
Diversified Sourcing Strategy
According to an HSBC Global Research report, India's crude imports have largely recovered to pre-conflict levels as refiners successfully diversified purchases beyond the Middle East. The report stated that refiners replaced Gulf supplies with crude sourced from Russia, the United States, Oman, West Africa, and South America. "After a dip in March, Indian crude imports have broadly returned to pre-conflict levels as refiners replaced Middle East supplies with alternatives from Russia, the US, Oman, West Africa and South America," the HSBC report said. HSBC also noted that Russian crude remains attractive because it continues to trade at a discount to Brent crude, while improved export availability from Russia has increased supplies for overseas buyers.
Supply and Demand Dynamics
Overall, India's crude imports remained broadly steady at around 4.9 million bpd in June, according to Kpler data. The table below compares the recent data:
| Metric | May (LSEG) | May (Kpler) | June (combined) |
|---|---|---|---|
| Russian crude imports (bpd) | 1.95 million | 2.13 million | 2.70 million |
| Russia's share of total imports | 36.5% | 36.5% | >50% |
| Total crude imports (bpd) | ~4.9 million | ~4.9 million | ~4.9 million |
A report by the Centre for Research on Energy and Clean Air (CREA) earlier this month stated that India remained the world's second-largest buyer of Russian fossil fuels in May, with Russian crude accounting for about 83% of its fossil fuel imports from Russia.
Price Outlook and Future Supply
HSBC noted that although Gulf exports are recovering following the reopening of the Strait of Hormuz, Asian refiners, including those in India, are unlikely to significantly raise purchases immediately as they have already secured cargoes for July and August and are entering planned maintenance periods. India's strategy of relying on discounted Russian barrels has further intensified in June, helping refiners maintain stable crude supplies while reducing exposure to geopolitical uncertainties in the Middle East. For commodity traders and procurement teams, the sustained discount of Russian crude relative to Brent and the availability of alternative sources from the US, Oman, West Africa, and South America will remain key factors to monitor as the market navigates potential shifts in Middle East supply and refinery maintenance schedules.
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