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Russian Oil Exports to India Surge, Fueled by Abundant Supply and Competitive Pricing

Russian oil exports to India have experienced a robust rebound, driven by a combination of increased supply and competitive pricing. Data from Kepler (Kpler), a provider of shipping tracking information, indicates a substantial 15% rise in Russian oil shipments to India in September, marking a significant recovery from a seven-month low observed in August.

According to Kepler, Russia shipped a total of 1.78 million barrels per day of oil to India in the previous month. Mr. Victor Katona, Chief Crude Oil Analyst at Kepler, highlighted that ample opportunities for further increases in imports from Russia exist. This potential surge in imports is attributed to Russia’s existing ban on diesel fuel exports, which subsequently leads to lower refining rates at Russian refineries. As a result, more crude oil becomes available for export to foreign nations.

The majority of Indian consumers opt for Ural grade oil, a more cost-effective alternative to Brent crude oil (BRENT), typically priced at approximately $4 per barrel less. This pricing advantage makes Russian crude oil particularly attractive compared to offerings from the Middle East. With Russia now boasting increased crude oil supplies, exporters may explore the possibility of offering even more substantial discounts in the future.

In contrast, oil imports from Iraq, India’s second-largest supplier, experienced a 9.4% increase in September, reaching 934,000 barrels per day. Meanwhile, imports from Saudi Arabia, India’s third-largest supplier, witnessed a significant 41% decline, falling to 491,000 barrels per day.

This development in the energy market reflects Russia’s growing influence in the Indian oil import landscape, primarily driven by competitive pricing strategies and increased supply capacity. As the global energy sector continues to evolve, these shifts in oil import patterns underscore the importance of pricing dynamics and supply availability for both exporting and importing nations.

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