Surge in Indian Purchases of Russian Oil
The impending end of a US sanctions waiver significantly influenced the increase in Indian purchases of Russian oil, which now accounts for over half of India’s total oil imports.
Sanctions Waiver and Its Impact
- The second 30-day waiver for purchases of Russian oil beyond the baseload volumes permitted by the Donald Trump administration is set to expire on May 16.
- Russian oil has been crucial for India's oil supply amidst disruptions in West Asian supplies caused by the Iran war.
India’s Dependency on Russian Oil
- India’s purchase of Russian crude hit an all-time high this month.
- Senior refining officials stress the need for an extension of the waiver to avoid a 15% shortfall compared to February levels.
- Refiners have used commercial and strategic stocks, with Nayara Energy and Reliance Industries shutting units for maintenance.
Competition and Imports
- Increased competition from China and other Asian nations for crude oil from Latin America and Africa.
- Russian oil shipments surpassed 2 million barrels per day (bpd) in two out of the last three months.
- Imports increased 36% month-to-date to 2.3-2.4 million bpd, 24% higher than the previous year.
Purchasing Patterns
- State-run Indian Oil was the largest purchaser at 907,000 bpd, marking a 28% increase from the prior year.
- Reliance Industries’ purchases dropped to 292,000 bpd, over 300,000 bpd lower than its 2025 average, due to EU regulations.
Russian Oil as a Substitute
- Russian oil is the closest substitute to disrupted West Asian grades like Iraqi Basrah and Saudi Arabian varieties.
- Urals grade offers better yields of diesel and jet fuel compared to African and American grades.
- The premium for Urals is $3-4 per barrel compared to over $100 per barrel for West African and Brazilian varieties.
