In a big shift, India has emerged as the world’s largest importer of Russian oil, surpassing China for the first time in July. According to Reuters, Indian refineries processed a record 2.07 million barrels per day (bpd) of Russian crude last month, making up 44% of India’s total oil imports. This is a huge leap from June and a 12% increase year-over-year.
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Chinese Demand Falls as India Increases Purchases
Chinese refiners have scaled back their Russian oil purchases due to shrinking profit margins from fuel production. This dip in Chinese demand has opened the door for India to absorb more of the discounted Russian crude, which has become a key factor in keeping global oil prices stable amidst ongoing geopolitical tensions. “India’s requirement for Russian oil is going to go up as long as there are no further tightening of sanctions,” an Indian refining source commented.
Indian Refineries Absorb Record Russian Crude Volumes
Indian refiners have been eagerly snapping up Russian oil, particularly the ESPO Blend, which saw its imports to India rise dramatically to 188,000 bpd in July. This shift is part of a broader trend as Indian refineries increasingly use larger Suezmax vessels to transport the crude, adapting to the changing dynamics of global oil trade.
China Scales Back on Russian Oil
With Chinese demand for Russian oil waning, largely due to lower profit margins, the flow of Russian crude has pivoted from China to South Asia. This is changing the global oil market and making traders rethink their usual strategies.
As India continues to increase its Russian oil imports, the flow of Russian ESPO Blend crude is shifting from its usual Chinese buyers to Indian markets. This adjustment highlights India’s growing role in the global oil trade and its strategic use of discounted Russian crude.
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