India’s Russian crude oil import rebound in Oct after dip in Q2

New Delhi: India’s crude oil imports from Russia strengthened in the first half of October, reversing a three-month slide in arrivals seen during July-September as refineries were back on full stream to meet festive demand, according to ship tracking data.

Imports from Russia slid from over 2 million barrels per day in June to 1.6 million bpd in September.

However, tanker-tracking data for early October suggest a rebound: shipments of Urals and other Russian grades to India have picked up pace, supported by renewed discounts amid slack demand in Western markets and shipping flexibility.

Preliminary data by global trade analytics firm Kpler showed October imports tracking around 1.8 million barrels per day (bpd), an increase of around 250,000 bpd from the previous month (though the current month data is subject to revision).

The data pertains to the period prior to US President Donald Trump’s October 15 statement claiming Prime Minister Narendra Modi has agreed to stop Russian crude imports. Ministry of External Affairs spokesperson Randhir Jaiswal, however, said he was not aware of such a phone conversation.

Sumit Ritolia, Lead Research Analyst (Refining & Modelling) at Kpler, believes Trump’s statement was more likely pressure tactics linked to trade negotiations rather than a reflection of an imminent policy change.

“Russian barrels remain deeply embedded in India’s energy system for economic, contractual, and strategic reasons,” he said. Indian refiners, too, said they have not yet been asked by the government to stop Russian oil imports.

India turned to purchasing Russian oil sold at a discount after Western countries imposed sanctions on Moscow and shunned its supplies over its invasion of Ukraine in February 2022. Consequently, from a mere 1.7 per cent share in total oil imports in 2019-20 (FY20), Russia’s share increased to 40 per cent in 2023-24, making it the biggest oil supplier to India.

In the first half of October, Russia continued to enjoy that status. Iraq was the second biggest crude oil supplier to India at around 1.01 million bpd, followed by Saudi Arabia at 8,30,000 bpd. The US has overtaken the UAE to become India’s fourth-largest supplier with 647,000 bpd. UAE supplied 394,000 bpd, according to Kpler.

Ritolia said Russian crude remains structurally vital for India, accounting for roughly 34 per cent of its total imports and offering compelling discounts that are too significant for refiners to ignore.

“There has been a lot of talk about the dip in imports during July-September. This was driven less by tariff concerns and more by seasonal factors, particularly increased maintenance activity at PSU refineries such as MRPL, CPCL, and BORL,” he said.

In fact, most contracts for deliveries up to early September were finalised 6–10 weeks in advance, meaning deals were largely locked in before July 31. So dips in July-September were mostly due to refinery processing less crude in view of maintenance schedules.

Even with narrower discounts than in 2023, Russian barrels remain one of the most economical feedstock options available to Indian refiners, due to landed discounts and high GPW (Gross Product Worth) margin outputs from grades such as Urals. Discounts average between $3.5-5 per barrel, up from $1.5-2 in July/August.

Replacing Russian crude is not difficult, as more barrels could flow from the Middle East, Latin America, and the US, similar to India’s pre-2022 crude slate.

Indian refineries can handle diverse crude grades, so the technical constraint is minimal.

But whether New Delhi is ready to make that shift is another matter, he said. “The reality is that cutting Russian imports would be difficult, costly, and risky.”