India's Increasing Reliance on Russian Crude

India's imports of Russian crude oil have significantly increased to 2 million barrels per day (bpd) in August, up from 1.6 million bpd in July. This surge has positioned Russia as the supplier of 38% of India's total crude imports, estimated at 5.2 million bpd for the first half of August.

Shift in Supply Dynamics

The rise in Russian imports has come at the expense of traditional suppliers like Iraq and Saudi Arabia, whose supplies to India have seen a noticeable decline. According to Kpler data, Iraq's supplies dropped to 730,000 bpd from 907,000 bpd, while Saudi Arabia's fell to 526,000 bpd from 700,000 bpd in July.

Impact of US Tariffs

Despite the imposition of additional tariffs by the US, Indian refiners have maintained their import levels from Russia. "Russian crude imports into India have so far remained resilient in August," noted Sumit Ritolia, Lead Research Analyst at Kpler, suggesting that any real adjustments would only be visible from late September.

Refiners' Stance on Russian Crude

Indian Oil Corporation (IOC) Chairman Arvinder Singh Sahney emphasized that there has been no directive to alter purchase volumes from Russia. "We are not making extra effort to either increase or decrease the share of Russian crude," he stated, highlighting the economic considerations behind their procurement strategy.

Future Procurement Strategies

With discounts on Russian crude narrowing, Indian refiners are exploring alternatives from the US, West Africa, and Latin America to mitigate risks. However, this is seen as a measure of flexibility rather than a deliberate shift away from Russian oil.