Russia supersedes Saudi Arabia to become second-biggest crude supplier to India: Report

Amid rising fuel demand in India and high crude oil prices in the global market, Russia has managed to beat OPEC+ ally Saudi Arabia to expand the market share of one of the largest crude oil importers, Bloomberg reported on Aug.

From April through June 2022, Russian barrels were cheaper than Saudi crude, supplying India with crude oil at a discount that rose to nearly $19 a barrel in May. Russia even emerged as India’s second largest supplier in June, just behind Iraq.

As most buyers shunned its barrels after the invasion of Ukraine, India and China have become willing consumers of Russian crude. To provide some economic relief amid high inflation and a record trade gap, India imports 85% of its oil needs from Russia.

ALSO READ: Center raises windfall tax on domestic crude oil, lowers excise duty on diesel exports

India’s crude oil import bill rose to $47.5 billion in the second quarter, according to government data, after a rise in world prices coincided with a pick-up in fuel demand. It was $25.1 billion in the same period in 2021, when prices and volumes were lower. Meanwhile, crude oil prices fell recently on concerns about an economic slowdown and providing some respite for consumers.

“Indian refiners are going to try to get the cheapest crude that will work with their refinery and product configurations. Russian crude oil fits that bill for now. The Saudis and Iraqis are not completely losing it because they are sending more supplies to Europe,” Bloomberg quoted Vanda Insights founder Vandana Hari as saying.

Despite Russian oil’s discount on Saudi crude narrowed in June, crude was about $13 cheaper and cost about $102 on average. Coincidentally, in 2021 Russia was the ninth largest supplier of crude oil to India, while Saudi Arabia was the second largest.

Meanwhile, Iraq remained the largest supplier of crude oil to India through June this year. In May, crude oil from the OPEC producer (Iraq) was about $9 a barrel higher than Russian barrels, but in all other months there was a discount. Since March, India’s imports from Russia have increased tenfold.

With Bloomberg inputs.

Check out all the business news, market news, latest news events and latest news updates on Live Mint. Download the Mint News app to get daily market updates.

More or less

Subscribe to Mint Newsletters

* Please enter a valid email address

* Thank you for subscribing to our newsletter.

Leave a Comment

Your email address will not be published.