Russia strengthens in Indian oil market at expense of OPEC titans

That would put it neck and neck with, or slightly above, Iraq, and far ahead of Saudi Arabia. The surge in flows will be perceived with concern by Baghdad in particular, since Iraqi oil has increasingly had to be discounted to conquer market shares in Asia.

Indian refiners have been gorging themselves on cheap Russian barrels like they never did before the invasion of Ukraine, which even made Vladimir Putin, the Russian president, notice.

Flows to Asia increased because some European companies stopped buying, forcing Russia to find alternative markets.

Vessel tracking figures vary from supplier to supplier, depending on different assumptions and underlying cargo information. But figures from Kpler, Vortexa and Bloomberg all point to the dominant position Russia has taken in India.

Kpler data shows Russian oil inflows to India have averaged 1.2 million barrels a day so far in June, a quarter of all crude entering the country. Daily supplies from Iraq will be around 1.01 million barrels, while those from Saudi Arabia are on track for 662,000 a day.

Vortexa figures suggest Russian deliveries of 1.16 million barrels per day, more than Iraq’s 1.131 million. The tanker tracker compiled by Bloomberg indicates that 988,000 barrels per day will arrive from Russia this month, slightly below a figure of 1.003 million per day from Iraq.

“We believe that this new business model between Russia and India should continue and could even intensify by the end of the year” following the implementation of new sanctions from the European Union, according to Homayoun Falakshahi, Principal Commodity Analyst at Kpler. “The bigger picture is leading to a reshuffling of flows, with more Middle Eastern crude going west to Europe.”

India has defended Russian purchases, citing its national interest in sourcing cheaper crude. The purchase delivered part of a treasure trove of silver that Russia collected in the commodity markets, financing its war.

Russia’s strength in Indian and Chinese markets has eaten away at Iraq’s and Saudi Arabia’s share in the world’s biggest oil-consuming region.

Combined deliveries from the two countries to India have fallen by about 500,000 barrels a day since April, as Russian flows increased, according to tracking data.

“When the price goes up and you have no choice, you will buy from anywhere,” Oil Minister Hardeep Singh Puri told reporters last week. “We have a very well-defined understanding of India’s interests.”

About Tammy N. McFarlane

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