NEW DELHI: India’s imports of Russian oil fell in August to a seven-month low as refiners curbed purchases due to planned maintenance outages at some plants and lower discounts for Russian grades.
However, oil imports from Saudi Arabia surged to a multi-month high, according to preliminary data from Kpler and Refinitiv trade flows.
Refiners in India have been snapping up discounted Russian oil after some Western buyers shunned purchases over Russia’s full-scale invasion of Ukraine in February last year.
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But India’s monthly imports of Russian oil have been declining since June as discounts began to shrink, the data from the two agencies show.
“Imports of Russian oil are likely to remain at subdued levels for a couple of months due to lower discounts, and that would force suppliers of Russian oil to provide deeper discounts,” said Refinitiv analyst Ehsan Ul Haq.
Discounts on Russian oil for October loading are below $5 a barrel to benchmark dated Brent, a refinery source said, adding his company had not yet placed an order for October Russian oil.
Buying Russian oil in spot markets gives Indian refiners greater flexibility than Middle Eastern purchases that are mostly under annual contracts.
A government source last month said Indian refiners could cut imports of Russian oil as narrowing discounts were raising the price of Russian grades to above the $60 per barrel ceiling set by Western nations.
India’s Russian oil imports in August declined by a fifth from July to about 1.5 million barrels per day (bpd) while those from Saudi Arabia leapt by about 63%, according to Refinitiv data.
According to Kpler estimates, India imported 1.35 million bpd of Russian oil in August, down from about 1.9 million bpd in July. Imports from Saudi Arabia rose to 825,000 bpd from 522,000 bpd in July.
India’s fuel demand is expected to rise in the next two months due to festivals, and that could further boost India’s oil imports from the Middle East, said Haq.
He said since the OPEC producer group is cutting oil output, at a time when gasoline demand in India and Asia is rising, “there is a possibility that Indians might increase imports of oil from the USA”.
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