Rivers of Russian Oil Flooding Indian Shores: Crude Imports Expected to Hit a 2-Year High in June 2025
Anticipated Imports of Russian Oil Set to Reach 2-Year Peak in June
India's thirst for Russian crude oil is surging like never before, with projections pointing towards a whopping 2.13 million barrels per day (mbpd) import in June 2025 - a figure not seen since the past two years. This explosion in imports is primarily fueled by jaw-dropping discounts and smart strategic maneuvers.
Hinting at a triumphant return, Russian oil supplies to India have been on an upward trajectory, poised to grow by a staggering 14.7%. In the chaos, Iraq, UAE, Saudi Arabia, and the United States trail in the dust.
The horizon isn't all rosy though. Iraq's oil exports have plunged by 31% to 746,148 barrels per day (bpd), while Saudi Arabia's supply has taken a 9.5% hit to 525,751 bpd. However, UAE's imports have breached new heights with a brawny 18% surge to 542,804 bpd. The United States maintains its position as India's fifth-largest oil supplier, pumping up the volume by 19% to 314,929 bpd, indicative of India's relentless pursuit for diversification and cost-effective arbitrage.
Sumit Ritolia, lead research analyst at Kpler, puts it succinctly, "Russian barrels haven't just been attractive, they've been irresistible!" He credits Russia's consistent price tag compared to global benchmarks like Brent and Dubai, and its cut-throat pricing against Middle Eastern grades on a landed-cost basis as the primary factors behind this unstoppable allure.
Aligning with this economic edge, Urals, Russia's premier offering, averaged around $50 per barrel FOB (Free On Board) in May, leagues below the $60/bbl price cap imposed by Western allies. India imported an impressive 1.85 million barrels per day of Russian oil in May, with Russia topping the charts as the number one supplier.
Ritolia's analytical eyes can't help but notice the advantages that this arrangement offers, "Not only do these favorable economics enhance refinery gross margins, but they have also summoned a hoard of shipping capacity. Over 20 tankers previously anchored in non-sanctioned trades have been repurposed for Urals delivery, escalating export flows."
Russia's corner of the pie is a massive 75% of the Russian imports, with Urals leading the charge. CPCl and ESPO trail behind, fighting for the runner-up position. Despite the ongoing adversity, sanctions, and geopolitical wrangling, Russian crude oil is expected to hold a steady 35-40% share in India's crude mix - as long as the margins stay hale and hearty, the pricing doesn't lose its appeal, and sanctions stay loose.
As Russia gains more traction as India's foremost crude oil supplier, India is taking a prudent gamble and diversifying its import basket in times of escalating geopolitical tensions. In the race to import over 1 million bpd of US oil across April-June 2025, India is charging ahead, keeping its sights on price-driven economies while managing risks in a fluctuating global oil market.
Sources: Arunima Bharadwaj, Kpler, Reserve Bank of India
*Russia's formidable position can be attributed to India's relentless pursuit of value for money and its ability to cater to India’s diverse geographical requirements.*Analysts predict that Russian crude is expected to maintain its dominance in India's oil mix due to healthy margins, competitive pricing, and lax enforcement of sanctions.*Despite the growing reliance on Russian crude, India remains committed to diversifying its import portfolio to hedge against potential risks and market instabilities.*Although the US is gaining ground, volumes will remain checked due to geopolitical considerations in addition to refining economics.
- In the dynamic international finance and energy industry, India is increasingly invested in the forex market, with a growing reliance on Russian oil, projected to reach a 2.13 million barrels per day import in June 2025.
- Amidst market fluctuations and geopolitical tensions, analysts like Sumit Ritolia at Kpler, see Defi (decentralized finance) opportunities in this situation, with Russian barrels offering irresistible pricing and margins, attracting more shipping capacity.
- As India navigates the oil-and-gas sector, it strategically manages risks by diversifying its import basket, aiming to import over 1 million bpd of US oil across April-June 2025, while maintaining its position as Russia's foremost crude oil buyer.
- Despite Russia's dominance in India's oil mix, the economy acknowledges the need for diversification to hedge against potential risks and market instabilities, ensuring a balanced approach toward various market players like Iraq, UAE, Saudi Arabia, the United States, and others.
- In the race to optimize cost-effective arbitrage, India's business ties with Russia are not only about crude oil imports but also about finding value for money, catering to diverse geographical requirements, and staying competitive in a fluctuating global market.
