India ramps up Russian oil imports  

India’s oil imports from Russia rose in September as overall demand for hydrocarbons increased ahead of the Diwali festive season, according to analytics firm Kpler, as reported by the Indian Express. 

Shipments from Russia to India grew by 6.4% compared to August, reaching 1.88 million barrels per day, which accounted for 40.2% of New Delhi’s total imports. Analysts noted a significant rise in import volumes due to the expected resumption of operations at most refineries undergoing maintenance, starting in October. 

The newspaper emphasized that India is “extremely sensitive” to oil prices. Although discounts on Russian fuel have narrowed over time, Indian refiners remain interested. Given the high import volumes, even lower discount levels lead to substantial savings. 

Viktor Katona, head of oil analytics at Kpler, noted that expectations of a reduction in India’s purchases from Russia did not materialize. However, data indicated a noticeable increase in imports from Saudi Arabia, which has reportedly reduced its prices in a bid to increase its market share in India.  

Katona noted that imports from Russia could rise further as Indian refineries seek to secure long-term contracts with Moscow for energy supplies. Business Standard reported last week, citing sources at the Ministry of Petroleum and Natural Gas, that India’s state-owned oil refiners are in talks with Russia to sign long-term supply agreements, potentially finalizing deals by next April, when the new fiscal year begins. 

As the world’s third-largest consumer of crude oil, India relies on imports for over 85% of its needs. Russia has become India’s top oil supplier, with New Delhi often highlighting Moscow’s role in ensuring the nation’s energy security. While private refiners already have annual contracts for Russian oil, state companies have primarily purchased it through spot markets, reserving long-term contracts for Middle Eastern sources. 

However, ministry sources indicated that high volatility in spot prices has made this arrangement less appealing. Long-term contracts are anticipated to stabilize pricing and provide India with consistent access to Russian oil at a lower cost. 

India significantly increased its purchases of Russian crude following the outbreak of the Ukraine conflict and subsequent Western sanctions on Moscow in 2022, capitalizing on the discounts offered after Russia lost traditional buyers in the West.