In a significant development in the global oil market, India’s reliance on Russian crude oil has surged to approximately 40% of its total oil imports in the first half of the fiscal year 2023/24, underscoring Russia’s increasing prominence as a critical supplier. This shift in India’s import patterns has been accompanied by a notable reduction in oil purchases from Middle Eastern nations.
India, positioned as the world’s third-largest oil importer, has emerged as a substantial purchaser of competitively priced Russian crude oil. This shift comes in the wake of Western countries ceasing their oil purchases from Russia in response to the geopolitical turmoil resulting from Russia’s invasion of Ukraine.
In the wake of these developments, the outlook for oil supplies from the Middle East appears to be tightening. Saudi Arabia, in particular, has opted to extend its voluntary oil production cuts through the conclusion of this year. This decision is poised to add further pressure on India to explore alternative options for securing its oil needs.
Over the period from April to September, India imported an average of 1.76 million barrels of crude oil daily from Russia, representing a significant increase from the approximately 780,000 barrels per day acquired during the same period in the previous year.
During the April-September timeframe, Russia retained its status as the largest oil supplier to India, closely followed by Iraq and Saudi Arabia. However, India’s oil imports from Iraq and Saudi Arabia declined by 12% and approximately 23%, respectively, amounting to 928,000 barrels per day and 607,500 barrels per day. This shifting landscape is a testament to the growing significance of Russia in India’s energy portfolio and its impact on the share of oil supplied by OPEC member nations.