India’s imports of Russian crude oil fell for a second consecutive month in January, recording their lowest levels in a year, as tighter sanctions from the West hit supply, preliminary ship tracking data shows.
India, the world’s third-biggest oil importer and consumer, upped its imports of Russian crude oil massively over the past year as Moscow redirected most of its supply away from Europe amid sanctions imposed after its invasion of Ukraine.
In January, imports from Russia declined by 4.2% to 1.3 million barrels per day, according to data from the London Stock Exchange Group (LSEG). Data from ship tracking agency Vortexa, analysed by Reuters, showed a bigger drop of 9% to 1.2 million barrels per day.
Serena Huang, Vortexa’s head of APAC analysis, said: “The narrowing of Russian crude discounts versus Middle Eastern crude, recent US sanctions on shipowners carrying Russian crude above the price cap and rising tanker premiums as a result of the Red Sea attacks have made Russian crude less attractive for Indian refiners in recent months.” She added that India’s imports of Russian oil could fall further over the coming months.
In December, almost five million barrels of the oil failed to reach India, with the country boosting its imports of Iraqi oil to offset the drop in Russian supply.
The US’ tightening of sanctions on oil tankers towards the end of last year hit supplies of Russia’s Sokol grade crude to India. The sanctions are designed to enforce a $60 price cap on vessels carrying Russian oil as a deterrent to companies shipping Russian crude and to stifle the country’s revenue from its energy products.
How well do you really know your competitors?
Access the most comprehensive Company Profiles on the market, powered by GlobalData. Save hours of research. Gain competitive edge.
Your download email will arrive shortly
Not ready to buy yet? Download a free sample
We are confident about the unique quality of our Company Profiles. However, we want you to make the most beneficial decision for your business, so we offer a free sample that you can download by submitting the below formBy GlobalData
Following the sanctions, several tankers that were meant to deliver Sokol crude to India were diverted, although LSEG data shows that India is still expecting at least five cargoes of Sokol crude in February, compared with none in January.
In November, three major Greek shipping companies also announced their exit from the Russian oil trade in a bid to avoid US sanctions.
In April last year, reports showed that despite European sanctions on Russian crude, the fuel was still making its way to countries on the continent via trade with India, leading chief EU diplomat Josep Borrell to urge member states to crack down on imports of Indian oil products.