With the sanctions against Russia and the Corona crisis in China, the global oil flows are being rearranged. India uses the price discount on Russian deliveries and expands the purchase. The country also gets more from Africa.
Russia in May became India’s second-largest oil supplier after Iraq, beating Saudi Arabia into third place. Last month, Indian refiners received around 819,000 barrels a day of Russian oil, according to trade statistics. This is the highest value so far. For comparison: in April it was only around 277,000 barrels (159 liters each).
Western sanctions against Russia following the February 24 invasion of Ukraine has caused many oil importers to avoid trading with Moscow. Because this reduced demand, the ridiculous prices for Russian crude oil were traded at record discounts compared to other types. This offered Indian refiners, who previously rarely bought Russian oil due to the high cost of transportation, an opportunity to purchase comparatively cheap crude oil.
Russian oils made up about 16.5 percent of total Indian imports in May. India has defended its purchase of “cheap” Russian oil, arguing that these imports represent a fraction of the country’s total needs and a sudden halt would skyrocket costs for consumers. At the same time, the proportion from the Middle East fell to around 59.5 percent, while that from Africa almost doubled to 11.5 percent.
“If you want to boost the production of diesel and kerosene, you need Nigerian and Angolan varieties,” said analyst Ehsan Ul Haq from financial services provider Refinitiv. Because of the Corona lockdowns, China bought less Angolan oil, which ended up in Europe and India instead.
India, which also gets a significant portion of its arms from Russia, has been trying to maintain a neutral stance since the Russian invasion began.
