Saudi Arabia overtakes Russia to be No.2 supplier of oil to India

Saudi Arabia has overtaken Russia to become India’s second-biggest supplier of oil, while Iraq continued to be the biggest exporter in August.

According to data, India bought 86,3,950 barrels per day (bpd) of crude oil from Saudi Arabia, recording a 4.8 per cent hike in imports, while shipping from Russia fell by 2.4 per cent to 85,5,950 bpd.

India was elevated to Russia’s No.2 importer of oil after China after western sanctions imposed on Moscow over the invasion of Ukraine left Russia with few takers for its oil.

Even though G7 countries have proposed a price cap on Russian oil to choke Moscow’s oil revenue, India has remained non-committal on pledging support to the same.

Ahead of Prime Minister Narendra Modi’s meeting with Russian President Vladimir Putin on the sidelines of the Shanghai Cooperation Organisation (SCO) at Samarkand, India has clarified that its procurement of Russian crude oil is not based on any government-to-government framework but rather on the country’s energy security requirement.

Since April this year, India’s crude oil imports from Moscow spiked over 50 times. The share of Russian oil among the entire oil imported by India rose from a mere 0.2 per cent before Ukraine’s invasion to 10 per cent after it.

According to data, between April and August, Russian oil accounted for 16 per cent of India’s overall oil imports, meaning India in a span of just five months imported about 757,000 bpd of oil compared to the 20,000 bpd it had imported a year earlier.

However, India’s monthly imports started declining from June onwards after Russia lowered its discounts.

“In the end you cannot cut Saudi supplies because of clauses in term contracts and Russia was able to reduce its discounts because of high demand especially in Asia,” Ehsan Ul Haq, an analyst with Refinitiv told Reuters.

India’s dependence on Caspian Sea oil, mined by Russia, Kazakhstan and Azerbaijan, has also affected its imports from Africa. In August India’s import of African oil was slashed by half to 4.2 per cent while that from Latin America fell from 7.7 per cent to 5.3 per cent.

The import of Saudi and Middle East oil to India increased to 59 per cent in August from 54 per cent in July.

In the same month, UAE was the fourth supplier of oil to India while Kuwait was replaced by Kazakhstan to be the fifth supplier followed by the United States.