India’s seaborne crude oil imports from Russia surge to 40 percent, altering trade dynamics.
Over the past three months, India has sourced 40 percent of its seaborne crude oil imports from Russia. “Year-to-date, volumes have averaged 1.6 million barrels per day (mbpd), a staggering 1,000 percent increase compared to 2021, before Russia’s invasion of Ukraine,” stated Niels Rasmussen, Chief Shipping Analyst at BIMCO. This surge in Russian oil imports has extended the average sailing distance for crude oil tankers to India by 10 percent, resulting in an 8 percent rise in total tonne miles despite a 2 percent decline in volumes. Compared to 2021, the average sailing distance has increased by 25 percent.
Indian buyers began ramping up Russian oil imports in 2022. Previously, the EU and the U.S. accounted for about 65 percent of Russia’s seaborne crude oil exports. Post-sanctions, Russia has found new buyers, including India and China. “With a spike and subsequent dip in mid-2023, Russian crude oil’s share of Indian seaborne imports has steadily climbed since mid-2022. India has emerged as the largest buyer since mid-2023, regularly purchasing 35-40 percent of Russian seaborne crude oil exports,” Rasmussen noted.
Historically, India imported nearly 70 percent of its seaborne crude oil from the Persian Gulf. However, increased imports from Russia have reduced this to 45 percent, with the Persian Gulf region now exporting more to North Europe and the Mediterranean.
“As long as sanctions remain, the Russia-India trade is likely to sustain current levels. However, the International Energy Agency predicts that while India’s oil demand will continue to grow, Russia’s production will not rise correspondingly. Consequently, India may need to seek additional suppliers to meet its future demand,” Rasmussen concluded.
