India's Import Of Cheap Russian Oil On Record High, Crude Oil Climbs Above $121 Per Barrel. Check Details

India as the third largest economy in Asia and the world's third biggest oil importer has turned to deeply discounted Russian oil, mostly Urals crude. This is aimed to cut its imports bill.

Crude oil in rail tankers

Source : Getty

New Delhi: India has managed to receive 34 million barrels of discounted Russian oil since Moscow invaded Ukraine, as per the news agency Reuters.  The report cited Refinitiv Eikon data stating that the value of total imports from Russia has trebled, including other products, compared with the same period of 2021.  India imported 24 million barrels of Russian crude in May, a rise from 7.2 million barrels in April and almost 3 million in March. Another 28 million barrels of rude oil is like to be imported to India in June, according to the Refinitiv Eikon oil flows.

India’s dependency on Russian oil

The volumes of India's seaborne oil imports from Russia exclude CPC Blend oil, which is also exported through Russia's Black Sea port, but mostly supplied by Kazakhstan's subsidiaries of western countries as transit volumes.

There has been rise in oil imports from Russia since February. India as the third largest economy in Asia and the world's third biggest oil importer has turned to deeply discounted Russian oil, mostly Urals crude. This is aimed to cut its imports bill.

The rise in energy imports have push India's total goods imports from Russia between February 24 and May 26 to $6.4 billion, compared with $1.99 billion in the same period last year, according to reports.

It is important to note that India's exports to Russia, however, fell nearly 50 per cent to $377.07 million over that period, as its government is yet to set up a formal payment mechanism.

The increase in India’s import of the Russian oil has come amid the West imposing a barrage of sanctions and India coming under fire for its continued purchases of Russian energy. However, New Delhi has dismissed the criticism saying those imports made only a fraction of the country's overall needs. India has clearly stated that it will keep buying "cheap" Russian oil, arguing a sudden stop would drive up costs for its consumers.

Moreover, oil prices climbed above $121 a barrel on Monday, hitting a two-month high as China lifted Covid-19 restrictions and traders expect that the European Union may reach an agreement to ban Russian oil imports, according to Reuters.

Trading activity was muted due to a public holiday in the United States. The Brent crude futures contract for July, which will expire on Tuesday, settled up $2.24, or 1.9 per cent, at $121.67 a barrel. U.S. West Texas Intermediate (WTI) crude futures were up $1.99, or 1.7 per cent, to $117.06 a barrel at 18.03 GMT, extending solid gains made last week.

On the other hand, the EU is deliberating on sixth package of sanctions against Russia for its invasion of Ukraine, which Moscow calls a "special military operation."

EU countries failed to agree on a Russian oil import ban despite last-minute haggling before the summit got under way in Brussels. But leaders of the 27 EU countries will agree in principle to an oil embargo, a draft of their summit conclusions showed, while leaving the practical details and hard decisions until later.