Amid Fresh Tighter Sanctions On Russian Oil, US Crude Shipments To India Surges

Last year, India emerged as the leading buyer of Russian oil, a position it assumed as other entities retreated from purchases in response to Western sanctions imposed on Moscow

India is set to receive over 250,000 barrels per day (bpd) of US crude next month, marking the highest influx in more than a year, ship tracking data has revealed. This surge comes amid fresh sanctions on Moscow crude by the West threatening to dent Russian oil sales to India, the biggest buyer of Russian seaborne crude.  As the world's third-largest oil importer and consumer, India now seeks to diversify its oil supplies because of looming threats to Russian oil sales.

About 7.6 million barrels of oil, equivalent to 256,000 bpd, are en route to India aboard three very large crude carriers and three Suezmax vessels, as per data from ship tracking firm Kpler.

Key players in this shipment include Reliance Industries, Vitol, Equinor, and Sinokor, as revealed by data from financial firm LSEG. Notably, Reliance, operator of the world's largest refining complex, has decided not to procure Russian oil loaded on tankers operated by Sovcomflot following recent US sanctions, sources disclosed to Reuters.

Last year, India emerged as the leading buyer of Russian oil, a position it assumed as other entities retreated from purchases in response to Western sanctions imposed on Moscow for its invasion of Ukraine in February 2022. In a bid to further curtail Russia's oil trade, the US recently expanded sanctions to include state-owned shipping firm Sovcomflot and 14 crude oil tankers involved in Russian oil transportation.

With more Indian refiners contemplating avoiding Sovcomflot vessels, imports of Russian oil may decline, leaving Russia with fewer outlets for its primary export commodity. This trend underscores India's strategic shift in oil procurement amidst evolving geopolitical dynamics and tightening sanctions on Russian entities.

Meanwhile, Monday's early Asian trading session saw a notable uptick in oil prices, driven by mounting concerns surrounding tightening global supply amid escalating tensions in the Middle East and between Russia and Ukraine. The market was additionally influenced by a decrease in the US rig count, which further bolstered prices upwards.