Russia became the fourth largest oil supplier to India in April with volume set to rise further in coming months as heavy discounted prices spur demand from India, accordion to Reuters.
Russia’s share in India’s oil purchases rose to a record 6%, about 277,000 barrels per day (bpd) in April, up from about 66,000 bpd in March, when it was in 10th position, according to the data, which was supplied by trade sources.
Indian Oil Corp., the country’s top refiner, bought its first-ever Russian Arco oil cargo last month.
“Prices of Russian Urals crude fell sharply due to sanctions against Russia while Kazakhstan’s CPC blend crude came under pressure as it is loaded from a Russian port,” said Ehsan Ul Haq, analyst with Refinitiv as reported by Reuters.
Indians had bought stranded Russian oil while some European buyers had bought higher volumes of African and U.S. oil, he said.
The share of African oil in India’s overall oil imports declined to about 6% in April from 14.5% in March, while that of U.S. almost halved to 3%.
India’s oil imports from Russia are set to rise further to about 487,500 bpd in May, since refiners have ramped up purchases from Russia, preliminary data from Refinitiv flows show.
In April, Indian refiners shipped in 4.7 million bpd of oil, up 6.9% from the previous month and about 11.6% higher than a year earlier, when a second COVID-19 wave hit local oil demand.
India’s oil imports in April were high as refiners raised runs to meet local demand and gain from robust refining margins, Haq said.
“Also the companies got Russian grades at very tempting rates and they had to lift committed volumes under term contract with Middle Eastern producers,” Haq said.
The higher imports from Russia dragged down OPEC’s share of foreign supplies to India in April.