India is on track to reach its highest level of oil imports from Russia in November, according to preliminary data from Kpler. This surge in imports comes as refiners hurried to secure barrels prior to a US deadline mandating the cessation of transactions with sanctioned Russian oil producers. Being the third-largest oil importer globally, India has emerged as the primary purchaser of discounted seaborne Russian crude, following Russia’s isolation by Western nations post its invasion of Ukraine in 2022.
Russian President Vladimir Putin is scheduled to visit India next month, as confirmed by the Kremlin. Notably, his last visit to the country was in December 2021, just before the escalation of tensions with the incursion into Ukraine. In response to the conflict, Britain, the European Union, and the United States have intensified sanctions on Moscow. The most recent measures by Washington specifically target Russia’s major producers, Rosneft and Lukoil.
The deadline for buyers of Russian oil to conclude dealings with Rosneft and Lukoil was November 21. Despite predictions of a decline in imports following the sanctions, India’s purchases of Russian oil are expected to rise to 1.855 million barrels per day (bpd) this month from 1.48 million bpd in October, as per provisional data from ship tracking agency Kpler. This anticipated increase defies expectations and marks the highest level since July.
Trade sources suggest that Russian oil supply is projected to remain high in November due to the rush to stockpile before the US sanctions deadline and the upcoming regulations on oil product production for the EU market. However, imports are anticipated to plummet in December, reaching the lowest levels in at least three years, as refiners seek alternative sources to comply with Western sanctions.
In response to heightened scrutiny post the latest US sanctions, Indian state refiners have become notably cautious. They are expected to receive around 600,000 to 650,000 barrels per day of Russian oil in December. Notably, major Indian refiners, including Indian Oil Corp, Nayara Energy, and Reliance Industries, have adjusted their import plans in response to the evolving geopolitical landscape. While most Indian refiners have halted Russian oil purchases, Reliance Industries has indicated its commitment to processing precommitted Russian oil cargoes.
The evolving global sanctions landscape has prompted Indian refiners to diversify their oil sources and adapt to changing geopolitical dynamics.