Russian crude oil imports to India have significantly decreased, reaching 310,000 barrels per day in the four weeks ending October 4, 2023. This figure represents the lowest four-week import level since the beginning of the increase in cheap Russian crude oil imports in March 2022, when India was seeking alternatives to Western oil sources.
Reasons for the Decrease in Imports
The reasons for the decrease in crude oil imports from Russia to India are primarily economic. The price of Russian crude oil, especially the "Urals" type loaded from Baltic ports, has increased and is now nearly equal to the prices of Middle Eastern oils. Meanwhile, the supply of Middle Eastern oils has increased in recent weeks, prompting Indian refineries to turn towards Gulf oil sources.
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Market Situation and Competition
Additionally, the "Urals" oil is currently being offered at a premium of over $10 per barrel compared to "Brent" oil. This price increase has led India to exercise more caution in purchasing Russian crude oil due to increasing competition with China for Russian oil supplies. Currently, Indian refineries, especially in light of the threat of 100% tariffs on imports of oil from Russia, are seeking better options.
Analysts believe that despite the threat of heavy tariffs, India will not be fully able to replace Russian crude oil imports. However, the economics of "Urals" oil prices and increased access to Middle Eastern oils have temporarily led to a reduction in Russian crude oil imports by India.
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