India's Crude Imports From Russia At New High In February, Surpass Combined Share Of Iraq And Saudi Arabia

India imported a record-high of 1.6 million barrels of crude oil per day in February from Russia, which constituted 35 per cent of the nation’s total imports, exceeding the combined share of Iraq and Saudi Arabia.

This gains further significance as Iraq and Saudi Arabia were the second- and third-largest suppliers of oil to India in February, according to the energy cargo tracker Vortexa.

India recorded a 28 per cent increase in imports from Russia for the month compared to the previous one, despite the EU imposing an embargo on Russian crude and the G-7 imposing a price cap.

In 2021, the Indian refiners procured less than 1 per cent of their crude from the Russian producers, with no imports recorded in February of the last year due to the expensive logistics of shipping oil from Russia.

Serena Huang, analyst at Vortexa, emphasised that the significant increase showed Russian oil is in demand from Indian refiners due to its desirable price, ET reported.

This growth has lowered the collective portion of Iraq and Saudi Arabia's imports to India down to 34 per cent since February 2022, when tensions between Russia and Ukraine sparked an extensive revision of oil markets.

Despite the price cap, imports of Russian oil by Indian refiners such as HPCL, BPCL and Indian Oil have remained unaffected yet payments have been made harder, ET reported citing people aware of the matter.

Western banks, meanwhile, have looked to get full insight into trades to guarantee only those Russian oil cargoes bought lower than the limit have been paid for.

As all US dollar transactions had to be settled in America, Indian refiners have modified to the UAE dirham and Russian roubles to buy cargoes beyond the cap, they revealed.

Given that India has the financial and logistical services to back the import of Russian crude, as Huang pointed out, there is no doubt that it will capitalise on the advantageous economics offered.

Evidently, the Indian government is likely to collaborate with HPCL and any other public sector refiners experiencing payment-related issues to find a solution.