News Brief

Indian Oil Imports From Russia Dip To 11-Month Low In December As Sokol Crude Deliveries Stumble

Kuldeep NegiJan 01, 2024, 12:13 PM | Updated 12:13 PM IST
(Representative image via Wikimedia).

(Representative image via Wikimedia).


An analysis of the most recent shipping data from commodity market analytics firm Kpler reveals that India's import of Russian oil dropped to its lowest point in 11 months in December.

This was due to the country's inability to receive any Sokol grade crude cargo.

However, the import volumes of Urals crude, which is the primary type of oil India imports from Russia, remained strong in the final month of 2023.

Over the past month, India has faced difficulties importing Sokol crude from Russia's Far East region due to issues concerning Western sanctions and payments, The Indian Express reported.

This has led to six oil tankers, loaded with Sokol crude for the state-run Indian Oil Corporation (IOC), being stuck near Indian waters for several weeks as they couldn't deliver the oil to their intended ports, Vadinar and Paradip, according to ship tracking data.

It's now shown that two of the six tankers have Chinese ports as their destinations, suggesting that the cargoes could eventually be used by Chinese refiners.

In December, Indian refiners imported 1.48 million barrels of Russian oil each day, marking an 11.6 per cent decrease from November's figures, according to Kpler data.

This was the lowest import volume since January 2023, which saw India importing 1.41 million barrels daily from Russia.

The December imports constituted 32.9 per cent of India's total oil imports of 4.51 million barrels per day, with Iraq (22 per cent) and Saudi Arabia (15.6 per cent) being the next largest contributors.

In contrast, in November, India’s crude imports were 4.52 million barrels per day, out of which 37.1 per cent was sourced from Russia, according to the data.

Viktor Katona, Kpler's Lead Crude Analyst, noted that the quantity of Urals purchased by Indian refiners has remained consistent, approximately 1.1-1.15 million bpd, similar to previous levels.

The significant shift this month was the complete lack of Sokol imports.

Over the year, Indian refineries typically procured an average of 140,000 bpd of Sokol.

However, December 2023 stands out as the only month in 2023 when India didn't buy any Sokol crude.


The NS Century, one of the tankers currently idle, was sanctioned by the United States for trading in Russian oil exceeding the $60 per barrel price cap set by the Group of Seven (G7).

The tanker was reportedly sanctioned while en route to Vadinar port.

Additionally, another significant problem that has surfaced is related to the payment procedure for Sokol crude.

Sakhalin-1 LLC, a subsidiary of the Russian oil giant Rosneft that provides Sokol crude to IOC, has been unsuccessful in establishing an account in the United Arab Emirates (UAE) for the purpose of receiving payments in dirhams.

Considering the fact that not every Indian bank can handle dollar payments for Russian crude oil, especially when it's challenging to demonstrate that the oil was purchased at a price following the G7 price cap, India's public sector refiners are now choosing to make payments in UAE dirhams for these shipments.

“The amassement of Sokol-laden tankers around India will most probably see a sudden resolution over the upcoming days. Of the six tankers that were idling around India’s coast, two have started to indicate Chinese final destinations. As the UAE banking delays of the Sakhalin-I project operator continue, effectively being unable to fully relocate the trading of Sokol cargoes into the relatively calm waters of the Dubai trading world, China might appear as the final solution for some cargoes,” Katona said.

Katona suggests that it may be premature to dismiss India's interest in the Far East Russian crude grade. This is evidenced by the recent booking of three tankers to transport Sokol crude, all of which have India as their final destination.

According to ship tracking data, two of these tankers are anticipated to deliver Sokol crude at Paradip port, while the third is expected to do so at Vadinar port.

Following the war in Ukraine, Western sanctions on Russia led to a shift in the global crude oil market. Consequently, India and China surfaced as the primary purchasers of Russian crude oil, representing the majority of Moscow's oil exports.

Before the conflict in Ukraine, Russia had a minimal role in India's oil imports.

However, when the West started boycotting Russian oil after Moscow's invasion of Ukraine in February 2022, Russia began providing significant price reductions on its oil to interested purchasers.

Indian oil refiners began taking advantage of the discounted barrels, propelling Russia to become India's leading oil supplier, surpassing long-standing giants such as Iraq and Saudi Arabia.

As the world's third-largest consumer of crude oil, India relies on imports to fulfill more than 85 per cent of its needs.

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