New Delhi: In 2023, India, the world’s third-largest oil importer and consumer, witnessed a historic shift in its crude oil import landscape as the annual share of OPEC’s oil hit an unprecedented low. Data sourced from trade and industry reveal that discounted Russian barrels, on the other hand, reached an all-time high in India’s oil market.
Traditionally, India has heavily depended on nearby Middle Eastern nations to fulfill the majority of its oil requirements, driven by the aim to reduce freight costs. However, the data from the past year indicates a significant transformation. For the first time, India imported nearly equal quantities of oil from both OPEC members and non-members, reflecting a diversification trend.
Throughout 2023, the South Asian nation imported an average of 4.65 million barrels per day (bpd), marking a 2% increase from the previous year. Notably, OPEC’s share in India’s crude oil imports plummeted to approximately 49.6% in the first nine months of the fiscal year, down from 64.5% in the same period a year earlier.
Various factors, including altered trade flows due to geopolitical tensions and higher shipping costs from traditional suppliers, have spurred India’s endeavors to diversify its import sources. This effort led to an increased reliance on cheaper supplies, even from distant regions like Russia.
The data highlights that Russian oil constituted about 36% of India’s total crude purchases in 2023, reaching 1.66 million bpd. In contrast, in 2022, India imported an average of 651,800 bpd of Russian oil. The availability of discounted Russian oil also played a role in diminishing India’s intake of Middle Eastern oil to the lowest levels on record.
The affordability of Russian oil for India became pronounced as western nations refrained from purchasing from Moscow in response to its invasion of Ukraine. Nevertheless, in December, India’s imports of Russian oil experienced a notable decline, reaching the lowest point in a year. This decrease was attributed to diversions caused by Washington’s tightened rules, including heightened scrutiny by banks and service providers to ensure compliance with the $60 per barrel price cap.
In December, India imported 1.34 million bpd of Russian oil, reflecting a 16.3% decline from November, with some shipments being diverted, as revealed by the data. Oil Minister Hardeep Singh Puri clarified that the diversions were a result of pricing considerations.
In a notable shift, Russia emerged as the top oil supplier to India in the preceding year, surpassing Iraq, which now holds the second position, while Saudi Arabia slipped to third place.
