This is a significant increase from 72% in September and an average of 75% from January to September. Imports of Urals crude rose by 20% to 1.39 million barrels per day (mbd) in October, according to energy cargo tracker Vortexa.
The availability of ESPO and Sokol crude at a discount of just $5-6 per barrel to the international benchmark Brent has led to the preference for Urals crude among Indian refiners.Oil prices have been volatile in recent months due to factors such as the conflict in the Middle East, OPEC+ supply curbs, and uncertain global demand.
Share of suppliers in India’s crude imports
An executive at an Indian refiner stated, “Indian refiners take Russian supply because it comes cheap. Russian grades, which make commercial sense, will get preference.”
However, India’s overall imports of Russian crude decreased by 4% sequentially to 1.55 mbd in October. In comparison, Chinese imports of seaborne Russian crude remained relatively stable at 1.2 mbd during the same period.
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Analysts predict that Indian imports from Russia are unlikely to increase in November due to limited availability and narrow discounts of Russian crude to Brent. Serena Huang, an analyst at Vortexa, stated, “Due to limited availability and narrow discounts of Russian crude to Brent, we may not see an increase in Russian crude imports by India in November.”
There have been concerns regarding the pricing of Russian oil above the G7 price cap of $60 per barrel. Despite the cap, most Russian oil is being sold at higher prices, and there have been instances of shipowners risking insurance revocation and sanctions by EU/G7 countries. However, it is believed that some shipowners have managed to evade detection while violating the price cap.
Currently, all Russian oil is being transported by non-Western ships, as the G7 sanctions prohibit the use of Western shipping, finance, and insurance for Russian oil sold above the cap.
The share of Russian oil in Indian crude imports decreased to 34% in October from 39% in September. However, India’s overall crude imports rose by 9% in October to 4.56 mbd.