India’s Russian oil imports rebound in October after July–September decline

Indiarsquos crude oil imports from Russia picked up in the first half of October reversing a threemonth decline in arrivals seen between July and September as refineries resumed full operations to meet festiveseason demand news agency PTI reported citing shiptracking dataImports from Russia had fallen from over 2 million barrels per day bpd in June to 16 million bpd in September However tankertracking data for early October indicate a rebound with shipments of Urals and other Russian grades picking up pace This was supported by renewed discounts amid slack demand in Western markets and greater shipping flexibilityPreliminary data from global trade analytics firm Kpler show October imports tracking around 18 million bpd up roughly 250000 lakh bpd from September though figures for the current month remain subject to revision PTI reportedThe data precede US President Donald Trumprsquos statement on Wednesday in which he had claimed that Prime Minister Narendra Modi had agreed to stop Russian crude imports Ministry of External Affairs Spokesperson Randhir Jaiswal however said he was not aware of any such phone conversationSumit Ritolia lead research analyst refining and modelling at Kpler said that Trumprsquos statement was more likely a pressure tactic linked to trade negotiations rather than a signal of an imminent policy shiftldquoRussian barrels remain deeply embedded in Indiarsquos energy system for economic contractual and strategic reasonsrdquo he addedIndian refiners also said they have not yet received any government directive to halt Russian oil importsIndia began purchasing Russian oil at discounted rates after Western countries imposed sanctions on Moscow and shunned its supplies following the Ukraine invasion in February 2022Russiarsquos share in Indiarsquos total crude imports has risen from just 17 per cent in 2019ndash20 to 40 per cent in 2023ndash24 making it Indiarsquos largest oil supplierIn the first half of October Russia continued to remain Indiarsquos largest supplierIraq was the secondlargest supplier at around 101 million bpd followed by Saudi Arabia at 830000 bpd PTI reported The US overtook the UAE to become Indiarsquos fourthlargest supplier at 647000 bpd while the UAE supplied 394000 bpd according to KplerRitolia emphasised the strategic importance of Russian crude for IndialdquoRussian crude remains structurally vital for India accounting for roughly 34 per cent of its total imports and offering compelling discounts that are too significant for refiners to ignorerdquo he saidRitolia further explained that the JulyndashSeptember dip in imports was driven less by tariff concerns and more by seasonal factors particularly maintenance activity at PSU refineries such as MRPL CPCL and BORLldquoMost contracts for deliveries up to early September were finalised 6ndash10 weeks in advance meaning deals were largely locked in before July 31 So dips in JulyndashSeptember were mostly due to refinery processing less crude in view of maintenance schedulesrdquo he addedEven with narrower discounts than in 2023 Russian barrels remain among the most economical feedstock options for Indian refiners due to landed discounts and high GPW Gross Product Worth margins from grades such as UralsDiscounts now average USD 35ndash5 per barrel up from USD 15ndash2 in July and AugustReplacing Russian crude is technically feasible as India could source more barrels from the Middle East Latin America and the US similar to the pre2022 crude slate Indian refineries are capable of handling diverse crude grades so technical constraints are minimalHowever Ritolia said ldquoThe reality is that cutting Russian imports would be difficult costly and riskyrdquo Substitution would require rapid scaling from multiple suppliers at higher costs including freight and weaker discounts Any margin compression or rise in retail prices could lead to inflation political backlash and lower refinery profitabilityHe noted that refiners are unlikely to forgo discounted Russian crude unless directed by the government similar to the approach with Iranian barrels While diversification efforts continue contracts for Russian crude are usually signed 6ndash10 weeks before delivery ldquoIn practice Indian refiners are gradually broadening their baskets not to replace Russia in the short term but to enhance energy security continuity and flexibilityrdquo he saidIndia has consistently pursued an independent foreign and energy policy balancing economic interests with diplomatic relationships A sudden shift away from Russian crude would undermine its energy security strategy and is unlikely unless formal sanctionsmdashsimilar to those on Iran or Venezuelamdashare imposedldquoAt this stage its improbable that India will implement structural cuts purely to satisfy US and EU political pressure If Washington intensifies pressure Indian refiners could make a token reductionmdashon the order of 100000ndash200000 bpdmdashto demonstrate diversification and appease Western partners However these cuts would likely be symbolic rather than transformativerdquo Ritolia addedIncreasing imports from the US to placate Trump is possible but the upside is limited to around 400000ndash500000 bpd due to logistical economic and compatibility challenges with Indian refining systems Kpler data show Indian imports of US crude have averaged 310000 bpd so far in 2025 up from 199000 bpd in 2024 with expected October imports reaching a yearly high of approximately 500000 bpdWith PTI inputs