India’s Russian Oil Imports Slide as Refiners Hunt for Alternatives
India's imports of Russian crude fell 16.5% in August to about 2.1 million barrels per day from July's record levels, and preliminary data indicates a further drop to roughly 1.9 million bpd in September. The decline comes as Indian refiners seek alternative supplies and after the U.S. enacted a law granting authority to levy tariffs of up to 100% on major buyers of Russian energy, though the law does not automatically impose tariffs.
Why It Matters
The shift matters because Russia is still India’s largest crude supplier, so changes in sourcing affect global flows and refine economics for the world's third-largest oil consumer; additionally, the new U.S. sanctions law raises the political and commercial risks tied to continued heavy Russian purchases.
Key Facts
- August decline: Russian crude imports to India fell 16.5% in August.
- August volume: About 2.1 million barrels per day in August (Reuters trade data).
- September preliminary: Preliminary Kpler data puts September imports at 1.9 million bpd.
- Total Indian crude imports (August): 4.44 million bpd, down 8.8% year-on-year.
- Iraqi purchases: Increased roughly 25% to 171,000 bpd in August.
India's flows of Russian crude eased in August, with shipments falling to about 2.1 million barrels per day from July's record levels, according to trade figures cited by Reuters. Preliminary vessel-tracking data from Kpler suggests imports continued to slide in September, near 1.9 million bpd. Despite the decline, Russia remained the country's top crude supplier.
Refiners in India have been reshaping their sourcing mix as Middle Eastern supply routes became more available. The country boosted purchases of Iraqi crude by roughly 25% to about 171,000 bpd in August, while Saudi volumes rose about 1.5% to 328,000 bpd. Shipments from the UAE fell about 5.4% to 620,000 bpd, although ADNOC has increased its capacity to move crude from inside the Strait of Hormuz to export points outside the strait.
The August drop in Russian purchases predates the U.S. law signed in September that grants the administration authority to impose tariffs of up to 100% on qualifying major buyers of Russian energy. That Lindsey O. Graham Sanctioning Russia and Iran Act does not automatically enact tariffs, but it adds a potential policy risk that Indian refiners are weighing when deciding whether to continue buying Russian barrels.
Economic factors are also influencing buying patterns. Between April and August, India's crude import bill climbed 48.4% year-on-year to $74.8 billion, even as import volumes edged down 0.4%. Higher global crude prices and freight costs have narrowed the advantage India gained from discounted Russian grades, prompting refiners to tap spot markets for replacement barrels while assessing the commercial and political trade-offs tied to future Russian purchases. October and November buying plans could alter the trend.