In January, Russia upheld its status as India’s leading crude oil supplier, contributing to almost a third of the country’s total crude imports, according to recent data from the commerce ministry.
With a surge of 41% year-on-year, the value of crude oil imports from Russia reached a significant $4.47 billion. Sequentially, these imports rose by 14% from December 2023, where they stood at $3.92 billion.
Despite concerns surrounding the Red Sea crisis, Russia maintained its position as India’s primary crude supplier throughout 2023, contributing over 30% of total imports. However, recent challenges to Russian oil shipments, including diversions in shipping routes, have necessitated cost recalculations.
Simultaneously, imports from traditional Gulf suppliers experienced declines. While Iraq emerged as India’s second-largest crude oil source in December, with $2.54 billion worth of imports, reflecting a 5% increase year-on-year, Saudi Arabia’s supplies dropped by 31.3% to $1.55 billion in January.
Among the top five suppliers, the United Arab Emirates (UAE) and the US followed, with their supplies valued at $980.24 million and $107.49 million, respectively. Interestingly, while the UAE saw a 6.70% rise in oil supplies to India in January 2024, US crude oil supplies plummeted by a staggering 91%.
Geopolitical tensions, particularly the conflict between Russia and Ukraine, have significantly influenced India’s oil import dynamics. Despite reductions in discounts, India’s procurement of Russian oil has continued, driven by economic considerations.
India’s total oil import bill increased moderately by over 4% sequentially to $12.04 billion in January, with marginal year-on-year growth of 0.1%. However, geopolitical tensions and decisions by the OPEC+ coalition, including Russia, to maintain reduced oil production, have pushed crude oil prices above $85 per barrel.
As of 01:40 pm, Brent crude for the May contract traded at $85.88 per barrel, marking a 0.63% increase from its previous closing.