India's imports of Russian oil increased by 6.6 percent in May, reaching 4.8 billion euros, according to data released by the Centre for Research on Energy and Clean Air (CREA). India remained the second-largest buyer of Russian fossil fuels after China, with crude oil accounting for the majority of purchases.
Reasons for the Rise
The rise was driven by increased Russian crude unloadings at key refineries including Vadinar, Jamnagar and Paradip, while state-owned refineries at New Mangalore and Visakhapatnam continued to expand imports. CREA also noted that the discount on Russia's Urals crude widened to around 25 percent against Brent, making Russian oil an attractive option for Indian refiners despite ongoing geopolitical tensions and sanctions-related concerns.
Geopolitical Context
India's continued reliance on Russian oil comes amid pressure from Western nations to reduce imports. However, the price advantage has made Russian crude a key component of India's energy security strategy. The widening discount, coupled with stable refinery demand, has sustained the upward trend in imports.
According to CREA, India's total fossil fuel imports from Russia have remained robust, with crude oil being the dominant category. The country's refineries have optimized their crude slates to take advantage of the discounted Urals grade, which has been trading at significant discounts compared to other benchmarks.
Impact on Refining
Key refineries such as those at Vadinar, Jamnagar, and Paradip have increased their processing of Russian crude, while state-owned units at New Mangalore and Visakhapatnam have also ramped up purchases. This trend highlights the operational flexibility of Indian refineries in sourcing cost-effective crude.
The data underscores India's position as a major buyer of Russian energy, second only to China. Despite international sanctions and diplomatic pressure, India has prioritized energy affordability, leveraging the price differential to support its refining and economic needs.
