While Europe shuns Russian oil amid sanctions and expectations of an oil embargo on Russian oil imports, India and China have stepped up purchases and are importing record volumes of Russian crude, according to data from energy analytics company Kpler cited by Bloomberg on Friday.
Russia had up to 79 million barrels of crude either traveling on tankers or held in floating storage over the past week, Kpler’s estimates have shown. That’s more than double the 27 million barrels of crude Russia had seaborne in February, just before Putin’s invasion of Ukraine.
Before the war, Russia was primarily selling its crude to Europe, but this is no longer the case after buyers, governments, international trading houses, and oil majors are all avoiding dealing with Russian oil, all the more so given the EU sanctions ban on bank transactions with the biggest Russian oil producers, including Rosneft. Trade majors have now wound down purchases of Russia’s oil.
But China and India aren’t shying away from Russian crude, although some Chinese state giants haven’t ramped up imports of spot cargoes from Russia despite the steep discounts at which Russian oil is selling.
In India, cheap Russian crude oil is attracting India’s price-sensitive buyers to the point that Russia became the fourth largest oil supplier to India in April, moving up from the 10th place in March, according to shipment-tracking data compiled by Reuters.
The significant increase in India’s purchases of Russian crude has already drawn the attention of the United States, which has reportedly sent a U.S. federal government official to discuss U.S. sanctions on Russia and try to convince India to reduce its purchases of Russian oil.
China, for its part, registered in April its first annual increase in crude oil imports since January as shipments rebounded on the back of higher arrivals from Russia, analysts say.
“Some of the interested buyers in Asia are more motivated by economics rather than taking a political stand,” Jane Xie, a senior oil analyst at Kpler in Singapore, told Bloomberg.