Russia sends record amount of oil to India in March

Russian oil companies in March 2023 increased oil exports to India by 4.6 times compared to March last year to 2.14 million barrels per day. This follows from the Kpler data, which Vedomosti has reviewed.

A similar opinion about record deliveries from Russia was given on April 9 by the Indian business publication Mint, citing data from the analytical company Vortexa. In March 2023, Russia was the largest oil supplier to India for the sixth consecutive month, analysts say. But in absolute terms, this estimate is significantly lower than that of Kpler: according to Vortexa, Russian oil supplies to India in March amounted to 1.64 million barrels per day.

According to the results of the first quarter of 2023, Russia ousted Iraq from the first place among oil suppliers to India, Kirill Rodionov, an expert at the Institute for the Development of Fuel and Energy Complex Technologies, notes, citing S&P data. He adds that the seven leading oil producers from the Middle East – Saudi Arabia, Iraq, UAE, Kuwait, Bahrain, Oman and Qatar – cut exports to India by 25% year-on-year to 2.34 bbl/d on the back of increased supplies from Russia.

Against the backdrop of growing exports to India, deliveries to China have been gradually declining since the beginning of this year. According to Kpler, in January 2023, offshore oil exports to China reached an all-time high of 1.51 million barrels per day (in the same month, deliveries to India amounted to 1.54 million barrels per day), and then fell to 870 800 bbl/d in March.

The growth of Russian oil supplies to India has been going on since August 2022. During this time, exports in this direction have grown by 2.5 times. Deliveries of raw materials to the Indian market from the Russian Federation became regular about a year ago. In March 2022, after the start of the NWO in Ukraine and increased sanctions pressure, Russian oil companies had to redirect supplies from Europe to new markets.

In March last year, the United States and Great Britain announced a complete rejection of Russian oil, and on December 5, 2022, an embargo on its offshore supplies to the European Union (EU) and a price ceiling of $60 per barrel came into force. As a result, the largest buyers of Russian oil last year were India and China, which in 2022 purchased 33.4 million tons and 86.25 million tons, respectively.

These two countries did not impose a price ceiling on Russian oil. Although in mid-March, Bloomberg sources claimed that India allegedly would not violate anti-Russian sanctions (including those related to the price ceiling), Indian Foreign Ministry spokesman Arindam Bagchi denied this information. He explained that the Indian authorities “come from their own requirements for energy security.”

Difficulties with a further increase in supplies to India, according to the analyst of FG “Finam” Andrey Maslov, are associated with a long logistical shoulder (which requires an additional fleet of tankers – Vedomosti). By the end of this year, he expects deliveries to India to rise to 2 mb/d from 1.6 mb/d in February 2023.

Rodionov believes that the dynamics of oil exports will be related to how quickly the export of petroleum products will grow. In March 2023, oil product deliveries abroad increased by 31.2% to 3.13 million barrels per day (Vedomosti wrote about this on April 5), and in the event of a further increase in fuel exports, oil supplies will reach a plateau, including number towards India, the expert adds.