India’s imports of Russian crude rose to a record high of 2.78 million barrels per day in July, accounting for 55.3% of the country’s total purchases of 5.03 mbd through July 29. Strong supplies of Russian Urals crude helped refiners navigate continuing volatility in West Asia, even as Moscow sharply cut discounts to $2-3/barrel recently.
“India’s crude imports have remained resilient, reaching a seasonal five-year high, supported by ample availability of Russian crude,” Nikhil Dubey, lead analyst for oil markets at Kpler, said.
“Ukrainian drone strikes on Russian refining infrastructure left more crude available for export, while cargoes stranded in the Middle East Gulf were released during the brief US-Iran ceasefire, further supporting supplies for Indian buyers,” he said.
The Iran conflict also triggered extreme swings in the price of Russia’s flagship Urals grade. Crude that had been available to Indian refiners at modest discounts before hostilities rose to a premium of $15-20 a barrel over benchmark Brent when fears of a supply squeeze peaked.
The brief ceasefire reversed the move, widening Urals discounts to $8-10 a barrel before prices tightened towards parity after fighting resumed. Cargoes for late-August and early-September delivery were offered in India at discounts of $2-3 a barrel late this month.
Price Swings
Russian inflows increased 1.8% from 2.73 mbd in June, while India’s overall imports edged up just 0.1% from 5.02 mbd. Moscow’s share rose from 54.4%, cementing its position as India’s dominant supplier. It has more than doubled from 23.4% in January, illustrating how rapidly the country’s crude basket has changed during the conflict.
West Asian barrels returned during July, but their recovery did not dislodge Russia. The United Arab Emirates was a distant second, supplying 488,900 bpd, or 9.7% of India’s crude basket. Its shipments declined 4.6% from June, widening the gap with Russia.
Combined shipments from Saudi Arabia, the United Arab Emirates, Iraq, Oman, Qatar, Kuwait and the Saudi-Kuwaiti Neutral Zone rose 15.8% month-on-month to nearly 1.2 mbd. Their share climbed to 23.8% from 20.6% in June.
Saudi Arabia recorded the sharpest increase among major suppliers, with volumes jumping 55% to 453,500 bpd and its share rising to 9% from 5.8%. The rebound, however, may be difficult to sustain if disruption in the Red Sea and around the Bab el-Mandeb Strait delays Asia-bound cargoes and raises shipping risks.
The UAE remained India’s second-largest supplier at 488,900 bpd, although shipments declined 4.6% and its share slipped to 9.7%. Oman’s flows surged 45% to 183,900 bpd, lifting its share to 3.7%, while Iraqi supplies rose 4.9% to 70,400 bpd, or 1.4% of the basket.
Refining Runs Surge
The sourcing mix shifted away from several Atlantic suppliers. Venezuelan shipments fell 14.8% to 239,300 bpd, reducing its share to 4.8%. Brazil declined 16.4% to 192,100 bpd, or 3.8%, while US supplies dropped 18.2% to 128,400 bpd, accounting for 2.6%.
Nigeria was an exception, with inflows rising 28.4% to 88,700 bpd and its share reaching 1.8%. Angolan supplies fell 47.2% to 33,900 bpd.
The availability of feedstock also lifted India’s refined-product trade. “Ample crude availability, coupled with an exceptionally strong refining margin environment and seasonally weak domestic demand during the monsoon, supported India’s product exports, which reached a seasonal five-year high,” Dubey said.
“The completion of maintenance at Nayara Energy and Reliance Industries in previous months boosted refinery runs and further supported export volumes,” he added.