Context:

In July, India imported 2.08 million barrels per day (bpd) of Russian crude oil, the highest since June of the previous year.

More on news

• India’s Russian oil imports registered a slight month-over-month growth to the highest level in over a year powered by strong flows of Moscow’s key crude grade Urals and an uptick in import of Eastern Siberia–Pacific Ocean oil pipeline (ESPO) crude, as per oil tanker tracking data and industry experts.
  The Eastern Siberia–Pacific Ocean oil pipeline is a pipeline system for exporting Russian crude oil to the Asia-Pacific markets. 
• Russia’s share was almost as much as the cumulative market share of the next four large suppliers—Iraq, Saudi Arabia, the United Arab Emirates (UAE), and the United States (US).
• June saw the highest Saudi formula prices (official selling price, (OSP)) this year, so buyers drastically cut their nominations for June-loading cargoes.
• Urals, a medium-sour crude, is the mainstay of India’s Russian oil imports. In July, Indian refiners cumulatively bought 1.42 million bpd of Urals crude.
• Before the war in Ukraine, Iraq and Saudi Arabia were the top two suppliers of crude oil to India.

Significance of buying oil from Russia

• Indian refiners saved at least $10.5 billion in foreign exchange between April 2022 and May 2024 by ramping up purchases of discounted Russian crude oil.
• In April-May—the first two months of FY25—the difference on account of Russian discounts is estimated at around $235 million.
• The average landed price of Russian crude imported by Indian refiners for FY24 was $76.39 per barrel, against $85.32—the average landed price of oil imported from all other suppliers, the analysis of Directorate General of Commercial Intelligence and Statistics (DGCIS).

India’s Oil Imports Scenario

• India is the world’s third-largest consumer of crude oil with a high import dependency level of over 85 percent, India is extremely sensitive to oil prices.
  The U.S. is currently the largest producer followed by Saudi Arabia and Russia.
  The U.S. is also the largest consumer of crude oil followed by China and India. 
• For 2023-24 (FY24), the total value of India’s oil imports was $139.86 billion, as per data from the Directorate General of Commercial Intelligence and Statistics (DGCIS).