India increased its Russian crude oil imports to approximately 2.7 million barrels per day in June, a 30% rise from May’s 1.95 to 2.13 million barrels per day. This surge pushed Russian oil to account for over 50% of India’s total crude imports, up from 36.5% in the previous month.
Shift in India’s Crude Import Sources
The closure of the Strait of Hormuz due to escalating Middle East conflicts has disrupted traditional oil supply routes. Indian refiners, seeking alternatives, turned to discounted Russian crude, which has been available at prices $10 to $20 below international benchmarks following Western sanctions imposed after Russia’s 2022 invasion of Ukraine.
India’s overall crude oil imports remained steady near 4.9 million barrels per day in June; however, volumes from Middle Eastern producers were largely replaced by Russian barrels. India’s expenditure on Russian crude oil reached about EUR 4.5 billion in June, representing 83% of its total fossil fuel imports from Russia. This solidifies India’s standing as the second-largest buyer of Russian hydrocarbons after China.
Impact on Sanctions and Energy Markets
The increased demand from India highlights a challenge in the Western sanctions regime aimed at reducing Russian energy revenues. Despite the rise in volumes sold to India, Russian oil export revenues have fallen due to price caps, insurance limitations, and shipping restrictions affecting Moscow's margins.
India insists its energy decisions prioritize national interests over geopolitics, underscoring the limits of sanctions in curbing non-Western demand for discounted Russian oil. This dynamic reshapes global energy flows and demonstrates how geopolitical tensions influence trade patterns in the oil markets.
This material is for informational purposes and does not constitute financial advice.
