India’s crude oil arrivals from Russia averaged 1.5 million barrels per day (mbd) in the first ten days of December, with predictive flows pointing to a potential rise to 1.6 mbd as per global real-time data and analytics provider Kpler.
Sanctions Widen Discounts, Fragmenting the Crude Market
This is despite the US sanctions on Russia’s major oil companies Rosneft and Lukoil from November 21.
While Russian oil flows remain below the 2024 average of 1.75 mbd, the decline is modest at ~250,000 barrels per day, Kpler noted. “As expected, two weeks after the US sanctions on Rosneft and Lukoil came into effect, the physical market for Russian crude has begun to fracture, but not break. Brent has gained only 2% since the effective date, yet Russian differentials have widened significantly,” Kpler said.
ESPO crude, Russia’s premium Asian crude grade, has seen its premium to ICE Brent flip to a deep discount, moving from +$2/bbl in the 30 days pre-sanctions to -$6/bbl or more now, according to Argus data.
Similarly, Russian Urals delivered to India’s west beach now trades at a steady $6.50/bbl discount, compared to just $2/bbl prior to the sanctions.
Refiners Adjust Buying Patterns Amid Compliance Risks
Kpler noted that while some state refiners including Indian Oil and Bharat Petroleum continue sourcing Russian oil, others like Hindustan Petroleum and MRPL have reduced Russian crude liftings.
“In the private sector, Nayara Energy, partly owned by Rosneft, remains anchored to Russian supply. Reliance’s imports of Russian crude may be entering new territory, even as the refinery continues to act as the key swing buyer. Two Russian cargoes were discharged at its Jamnagar facility this week, the first since sanctions took effect,” Kpler said, adding that it estimates Jamnagar to gradually wind down its intake of Russian crude.
“These recent arrivals do not necessarily signal a structural shift in buying patterns, and we still expect purchases to taper as refiners adjust to the evolving sanctions landscape,” Kpler said.
In November, the country’s Russian oil purchases hit a 5-month high of 1.8 million barrels per day. Shipments of Russian grade accounted for over 35% of the country’s total crude import mix in the month.
The surge in inward shipments of Urals was due to front-loaded arrivals ahead of the November 21 deadline for the US sanctions to take effect. Refiners accelerated scheduling and speeded up vessel turnarounds, particularly for Rosneft- and Lukoil-linked cargoes
“On sentiment, refiners emphasise that Russian oil itself isn’t sanctioned—only certain entities are. As long as they stick to compliant, non-designated suppliers, purchases should continue. Current discounts are still attractive, which also supports ongoing demand,” Sumit Ritolia, Lead Research Analyst, Refining & Modeling at Kpler had said.
In the medium term, refiners are already adjusting. Ritolia had noted that there is a shift toward non-designated Russian entities, more use of opaque trading channels, and increased sourcing from the Middle East, West Africa, and the Americas.