In July, India surpassed China to become the world's largest importer of Russian oil, as Chinese refineries reduced their purchases due to diminished profit margins from fuel production, according to a comparison of import data.
Russian crude accounted for a record 44 percent of India's total imports last month, reaching an all-time high of 2.07 million barrels per day (bpd), which is 4.2 percent more than in June and 12 percent higher than the same period last year, as per data from trade and industry sources on Indian shipments.
This outpaced China's July oil imports from Russia, which amounted to 1.76 million bpd through pipelines and shipments, based on Chinese customs data. Indian refiners have been aggressively purchasing Russian oil sold at discounts following sanctions imposed by Western nations on Moscow and their reduction in energy purchases in response to Russia's invasion of Ukraine.
"India's demand for Russian oil is expected to increase as long as there are no additional sanctions tightening," stated a source from the Indian refining sector. India's trade with Russia has expanded since the start of Russia's war against Ukraine in February 2022, primarily due to increased imports of oil and fertilizers, which has helped stabilize global prices and control inflation.
India's growing imports are altering the distribution of Russian ESPO Blend crude, shifting from traditional Chinese buyers to South Asia. ESPO imports to India surged in July to 188,000 bpd due to the use of larger Suezmax vessels, according to the data. Refiners in northeast China usually dominate ESPO purchases due to their geographical proximity, but their demand has declined due to weak fuel demand.
Iraq remained India's second-largest oil supplier in July, followed by Saudi Arabia and the United Arab Emirates. India's crude oil purchases from the Middle East increased by 4 percent in July, raising the region's share in India's overall oil mix to 40 percent from 38 percent in June, as indicated by the data.
