India’s appetite for Russian crudes in October rose to levels not seen in recent years and surpassed volumes shipped by leading Middle Eastern suppliers, as refiners rushed to snap up plentiful cargoes ahead of any potential shipping or policy hurdles once the EU’s sanctions kick in, according to S&P Global Commodity Insights.

From a market share of less than 1% in India’s import basket before the start of the Russia-Ukraine conflict, Russia’s share of India’s imports rose to 4.24 million mt, or nearly 1 million b/d, in October, taking a 21% share comparable to that of Iraq and higher than Saudi Arabia’s share of around 15% in the country’s import basket in the same month, S&P Global data showed.

“Since the voyage time to India from Russian ports ranges from 2-5 weeks, the crude that arrived in October must have been purchased months in advance,” said Shreyans Baid, senior oil analyst for South Asia at S&P Global Commodity Insights.

“But future purchases of Russian crudes by Indian refiners will depend on how the EU ban shapes up the seaborne trade and whether Russian crudes make economic sense given high freight rates and the market structure,” he added.

“As the refineries start up from planned maintenance schedules, Indian crude imports have seen a jump in October and are likely to stay healthy in upcoming months,” Baid said.

“Despite the jump in Russian crude inflows, overall, the Middle East as a region still remains the largest supplier of crudes to India, with a combined share of close to about 55%.”

The rising share of Russian crude sales to India has also taken a toll on the country’s appetite for African crudes. This, combined with a tighter market structure, as well as increased volatility in freight markets have led to the share of West African crudes dropping from 12.5% in January-September 2021 to 8.4% in the same 2022 period.
Source: Livemint