Indian refiners are scaling back purchases of Russian crude from elevated levels as Ukrainian attacks hurt flows from the nation's top supplier, according to a Bloomberg report published by The Hindu BusinessLine. Processors have been seeking alternative barrels from regions including West Africa and even the Americas, while also turning to Persian Gulf suppliers despite still-restricted flows through the Strait of Hormuz because of the US-Iran war, Bloomberg reported.
Supply Disruption Drives Diversification
Waves of Ukrainian attacks on Russia's refiners and Black Sea ports have both spurred local fuel shortages and prevented Moscow from diverting crude into the export market, Bloomberg reported. Over the past four weeks, Russia's overseas crude shipments fell to about 3.5 million barrels a day, from a high of over 4 million barrels a day in July, according to tanker-movement data compiled by Bloomberg.
Indian Oil Corp., the nation's largest refiner, recently issued tenders for supply from as far away as the Americas — a rare move — as well as another tender that mainly sought crudes from the Persian Gulf, Bloomberg reported. Industry peers Hindustan Petroleum Corp. and Mangalore Refinery & Petrochemicals Ltd. also made snap purchases of non-Russian crude this week. IOC, HPCL and MRPL didn't immediately respond to requests for comment.
Indian Imports and Russian Export Availability
This month, Indian imports of Russian crude are expected to fall to about 2 million barrels a day, down from a high of around 2.8 million barrels a day in July, according to Sumit Ritolia, senior manager of modeling at analytics firm Kpler. Ritolia said the decline reflects:
some normalization after very strong crude-buying in recent months, lower Russian export availability and increasing competition from China
... as well as the plant maintenance. Flows from Russia to India are now expected to normalize above the 2-million-barrel-a-day level in the coming months, he added.
| Metric | July level | Latest / expected |
|---|---|---|
| India's imports of Russian crude | ~2.8 million b/d | ~2 million b/d expected this month |
| Russia's overseas crude shipments | over 4 million b/d | ~3.5 million b/d over past four weeks |
| Russia's share of India's crude imports | more than half of imports last month | normalizing above 2 million b/d expected |
Demand, Maintenance and Competition with China
The shift in Indian processors' buying patterns coincides with an expected increase in nationwide demand as a spate of plant maintenance comes to an end, enabling refiners to boost run rates and step up production, Bloomberg reported. India was also competing with China for cut-price barrels, according to Kpler's Ritolia. October-loading cargoes of Sokol — which ship from Russia's east — were bought unusually early, pointing to stronger so-called forward demand and rising interest in available grades, he added.
India and China usually don't compete with each other for western and eastern Russian oil varieties, respectively, but the tightening market may shift that stance, according to Ritolia. The global crude market is grappling with disruptions caused by the conflicts between Moscow and Kyiv, as well as in the Middle East, Bloomberg reported. Russia became India's dominant supplier after the war in Ukraine erupted in 2022, and last month flows from the OPEC+ producer accounted for more than half of India's imports.
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